New push to kill estate tax
—Lawmakers reject permanent law on estate provisions.
Congress agreed to a permanent rate and exemption level for estate taxes just six months ago, but a new push is on among lawmakers to permanently repeal the tax.
Several members of Congress announced Wednesday their efforts to repeal the so-called “death tax” as a way to protect farmers, ranchers and small-business owners.
Last January, Congress agreed to a 40 percent tax rate for the estate tax and a $5.25 million asset exemption per individual.
The exemption also is indexed for inflation. Yet, just two months later, President Barack Obama opened the door to redefining “permanent” by proposing in his budget to raise the tax rate to 45 percent and lower the exemption to $3.5 million.
Congress largely has rejected the president’s call to increase the estate tax.
In the Senate, Sen. John Thune, R-SD, and Senate Finance Committee ranking member Orrin Hatch, R-Utah, are spearheading the effort to permanently eliminate the tax. Thune cited the effect of the tax on farmers and ranchers in his state, where land values have increased dramatically in recent years.
“We have seen land values go up in the last five years by 50 percent,” Thune said, reiterating the challenge that some farmers and ranchers are cashpoor but asset-rich.
Hatch noted the tax would still affect roughly 2,400 farmers this year and another 2,700 businesses. “And we don’t get that much from it.”
Thune said a bill to eliminate the estate tax would amount to about $20 billion in lost federal revenue.
However, advocates for eliminating the tax argue that getting rid of it would stimulate more economic growth and jobs. Thune and Hatch also indicated attempts to eliminate the tax could be part of a broader overall tax reform package.
Also speaking at the press event was Steve Foglesong, owner of Black Gold Ranch in Illinois, and past president of the National Cattlemen’s Beef Association (NCBA).
“NCBA continues to fight for full and permanent repeal of the estate tax, and we strongly support the Death Tax Repeal Act of 2013,” Foglesong said. “America’s farm and ranch families should not be forced to sell off land, farm equipment, parts of the operation or the entire ranch to pay off tax liabilities and attorney fees.”
The American Farm Bureau also supports efforts to repeal the tax.
Senate Minority Leader Mitch McConnell, R-KY, lent his support for the effort to get rid of the tax as well, calling the estate tax the “final outrage” a person can face at death. He noted it has been an incremental process to whittle down the tax and its effects. “But the death tax shouldn’t exist at all,” McConnell said. “And I don’t think any of us will rest easy until we get rid of the government’s final outrage.”
In the House, Rep. Kevin Brady, R-TX, is carrying the torch to eliminate the tax. Brady called the tax unfair to families that have worked their lives to build a nest egg only to see the government swoop in and take a stake in the estate. “This tax is an immoral tax that needs to be repealed once and for all,” Brady said.
Rep. Kristi Noem, R-SD, said her family was affected by the estate tax when she was younger, which has led her to be a champion for its elimination. “As long as I am going to be advocating for farmers and ranchers, I’m going to be talking about the death tax.” — Chris Clayton, DTN