Commentary: Federal estate tax threatens to become ‘a fine mess’
Issue Date: January 13, 2010
By Jack King
The old Laurel and Hardy line would likely best describe the current estate tax situation: “What a fine mess you’ve gotten us into,” Hardy would tell Laurel. And, if something is not done in 2010, California agriculture will be in a fine mess with estate tax treatment.
Nothing is a given at this point. Nearly everyone figured that Congress would act before the 2010 one-year repeal of the estate tax would kick in, but the Senate failed to act. Now, some key senators are saying that all bets are off that the Senate will designate the tax allowance needed to establish an exemption above $1 million for 2011. Remember, the 2001 tax cuts expire next year unless reinstated; that includes the treatment of estate tax and capital gains.
While the current repeal is great for now, few of our farmers or ranchers will be able to plan beyond the end of this year, and that is a train wreck in the making.
We must work for a positive outcome, beyond just this year. The California Farm Bureau is determined to achieve the best outcome possible. Here are our objectives beyond the ultimate goal of full and permanent repeal: 1) the highest exemption level possible; 2) stepped-up basis; 3) indexing for inflation; and 4) an exclusion from the estate tax settlement, as long as the estate remains as a family agricultural entity.
When the time is right, we will need the help of every Farm Bureau member to make telephone calls, write letters and hold face-to-face meetings with legislators. One way to help is to join the CFBF Farm Team. Through Ag Alert and Farm Team, we will keep you posted on where the issue stands and will urge you to call and write at the most opportune time.
Too many in Congress believe that estate taxes pose no problem for farmers and ranchers. Once told that the problems are real and occurring throughout California, there is a great deal of support for keeping our farms intact. Our job is to get that word out. We’ll be following this issue closely and communicating periodically to keep you informed.
More than 36 California agricultural groups have signed on to advocate for agricultural exclusion. An additional 55 national and regional groups are part of a broader coalition.
Please help us get the word out with your personal responses.
(Jack King is manager of the California Farm Bureau Federation National Affairs Division. He may be contacted at mailto:email@example.com.)
Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.