Congress resurrects estate tax relief

Farm Bureau, NCBA hope current exemption levels extended

By TIM HEARDEN
Capital Press

Estate tax relief has been proposed again in Congress, but cattle and farming industry experts are hoping the inheritance tax doesn't go up after next year.

A bill co-sponsored by two Western lawmakers would phase in over 10 years an increase of the so-called "death tax" exemption to $5 million while reducing the rate on taxable estates to 35 percent. Currently, the estate tax is set at 45 percent for estates worth more than $3.5 million, $7 million for a couple.

Among the bill's backers are the American Farm Bureau Federation and the National Cattlemen's Beef Association. If nothing else, though, Jill Davidsaver, the NCBA's manager of legislative affairs, would like to see Congress extend the current exemption levels, which are set to expire after 2010.

"The environment is still kind of an unknown," Davidsaver said. "We're operating under the assumption that if nothing (else), the House will extend the current law. It could be a one-year extension, or it could be a permanent extension."

House Resolution 3905, the Estate Tax Relief Act of 2009, was introduced in late October by Rep. Shelley Berkley, D-Nev., and has three co-sponsors, including Rep. Devin Nunes, R-Calif.

The bill aims to prevent inheritance tax rates from reverting in 2011 to pre-2001 levels, with estates worth more than $1 million taxed at 55 percent.

The legislation is the latest of several efforts this year to extend estate tax relief signed by President George W. Bush early in his administration. A Senate budget amendment similar to the House bill was stripped by lawmakers in the spring, and two Democratic congressmen introduced a bill in July that would exempt certain land from the estate tax as long as the property is kept in agriculture.

However, any quest for estate tax relief this year may be complicated by the push for health care reform, for which higher taxes on upper-income individuals have been discussed.

Pat Wolff, a tax specialist for the American Farm Bureau Federation, said the federal budget could withstand an extension of the current tax rates, but further relief would have to be offset by other spending cuts or revenue increases.

"There's reason to believe Congress will take up this legislation because the budget provides for it and it's the will of the majority of Congress," Wolff said. "The real question is, will they do something that provides more relief than current law?"

An NCBA member was set to testify Wednesday, Nov. 4, before the House Small Business Committee. Davidsaver said the current estate tax relief and agriculture exemption bills would be the "best vehicle" for protecting families' farms and ranches.

"We see that as the best-case scenario," she said. "But anything on top of current law (the approaching expiration of tax relief) is better than nothing."