Estate tax up for debate in DC

Indiana Farm Bureau supports federal legislation introduced today in both the House and Senate that would permanently repeal the estate tax. The Death Tax Repeal Act of 2013 is a welcome addition to the accelerated repeal of Indiana’s inheritance tax this year by the Indiana General Assembly. IFB encourages the entire Indiana congressional delegation to support the repeal of the federal estate tax.

While significant relief was enacted last year to help farmers cope with estate taxes, IFB believes that permanent repeal is still the best solution to protect all farms. The legislation introduced today would repeal the estate tax, maintain stepped-up basis and make permanent a 35 percent maximum gift tax rate and $5 million lifetime gift tax exemption indexed for inflation.   “Individuals, family partnerships and family corporations own more than 95 percent of Indiana’s 61,000 farms,” said Megan Ritter, IFB director of public policy.  “When estate taxes on the family farm exceed cash and other liquid assets, surviving family partners may be forced to sell land, buildings or equipment to stay in business. This can not only cripple the farm operation, but it also hurts the rural communities that agriculture supports.”

The value of family-owned farms is usually tied to illiquid assets, such as land, buildings and equipment. On average, 85 percent of farm assets are illiquid, and therefore producers have few options when it comes to generating cash to pay the estate tax. Recent increases in cropland values, on average 15 percent from 2011 to 2012, have greatly expanded the number of farms that now top the estate tax exemption. “Indiana Farm Bureau believes the estate tax should be eliminated permanently,” concluded Ritter. “We fully support the Death Tax Repeal Act of 2013 and ask our representatives in Washington, D.C., to do the same.”

ccording to Steve Foglesong – past president of the National Cattlemen’s Beef Association – the estate tax is a prime example of bad tax policy. He says it’s essentially a death warrant for small-to-medium sized family businesses. While significant tax relief was enacted last year to help farmers cope with estate taxes – Farm Bureau believes permanent repeal is the best solution to protect all farms and ranchers. NCBA is also fighting for full and permanent repeal of the estate tax. Farm Bureau President Bob Stallman notes individuals, family partnerships and family corporations own 98-percent of the nation’s two-million farms and ranchers. Farm Bureau notes the value of family-owned farms and ranches is usually tied to illiquid assets. With 85-percent of farm and ranch assets illiquid – the group says producers have few options when it comes to generating cash to pay the estate tax. When estate taxes on an agricultural business exceed cash and other liquid assets – Stallman says surviving family partners may be forced to sell land, buildings or equipment needed to keep their business running. Not only can this cripple a farm or ranch operation – Stallman says – but it hurts the rural communities and businesses that agriculture supports.

House version of the Farm Bill an uphill battle.

Stutzman Add to Pile of Amendments for House Farm Bill, White House Threatens Veto

June 17, 2013
Gary Truitt

Marlin Stutzman

The House Rules Committee had not yet set the rule on the Farm Bill. House Ag Committee Chair Frank Lucas and Ranking Member Collin Peterson are expected to ask for a rule that allows debate on all subjects House members want to discuss, but limits the number of amendments on each subject. The Rules Committee will meet Tuesday to issue a rule on how farm bill amendments will be handled on the House floor.

The deadline for submission of amendments was two o’clock Eastern on Monday afternoon. As of five o’clock Eastern, the House Rules Committee had posted 226 amendments. Twenty-eight of those were marked as late. Among those filed on time, there is an amendment to set the target price for all crops at 55percent of the five-year rolling Olympic average and change the acreage available for target price support to 85 percent of the farmer’s base acres; an effort to reform the federal sugar program; amendments aimed at changing crop insurance premium subsidies; an amendment to replace the dairy producer margin protection and dairy market stabilization programs; and of course, several amendments that would make changes to the Supplemental Nutrition Assistance Program.

On Monday, Indiana Congressman Marlin Stutzman, a fourth-generation farmer, filed amendments with the House Committee on Rules to divide the farm bill into a true, “farm-only” farm bill and separate food stamp legislation. “Right now, this trillion dollar spending package is a farm bill in name only. Congress must remove welfare provisions from the farm bill and give taxpayers the honest debate they deserve on both. It’s simple: food stamp policy isn’t farm policy. Yet, most Americans are shocked to learn that about 80 percent of the farm bill’s spending goes to Washington’s out-of-control food stamp program. With our nation nearly $17 trillion in debt, the American people deserve an open, transparent debate and that can only happen when Washington stops playing games with deceptively named spending bills.”

Also on Monday, the White House released its position on the House version of the Farm Bill. In a statement it said, “The Administration strongly opposes H.R. 1947, the Federal Agriculture Reform and Risk Management Act of 2013.  The bill would reduce access to food assistance for struggling families and their children, does not contain sufficient commodity and crop insurance reforms, and does not provide funding for renewable energy, which is an important source of jobs and economic growth in rural communities across the country. The Administration strongly opposes the harmful cuts to the Supplemental Nutrition Assistance Program (SNAP), a cornerstone of our Nation’s food assistance safety net.  The bill makes unacceptable deep cuts in SNAP, which could increase hunger among millions of Americans who are struggling to make ends meet, including families with children and senior citizens.  The Administration believes that Congress should achieve significant budgetary savings to help reduce the deficit without creating hardship for vulnerable families – for example, by reducing crop insurance subsidies.  Rather than reducing crop insurance subsidies by $11.7 billion over 10 years, as proposed in the President’s Budget, H.R. 1947 would increase reference prices for farmers by roughly 45 percent and increase already generous crop insurance subsidies at a cost of nearly $9 billion over 10 years to the Nation’s taxpayers.”

The President’s statement said, as it stands, he would veto the House version of the Farm  Bill. What would the Obama administration accept?  The statement  indicated that, “The Administration supports enactment of a multi-year Farm Bill that includes a long-term extension of disaster programs and promotes rural development, preserves a farm safety net, maintains strong nutrition programs, encourages the development of local and regional markets, enhances conservation, supports environmental stewardship, complies with our World Trade Organization commitments, advances agricultural research, and provides funding for renewable energy.  In addition, the Administration believes that crop insurance payments should be tied to the Nation’s soil conservation and wetland protection goals. The legislation should also contribute significantly to deficit reduction, with savings from reforms proposed in the President’s Budget.”