ESTATE TAX BILL INTRODUCED IN HOUSE
WASHINGTON, D.C. -- Reps. Bud Cramer (D-Ala.) and Kenny Hulshof (R-Mo.) have introduced H.R. 2380, the Death Tax Repeal Permanency Act of 2007, with 67 cosponsors.
The bill strikes the sunset clause in current law so that when death tax repeal takes place in 2010, it will be permanent. Under current law, death taxes would be repealed for only one year and would be reinstated in 2011, with a $1 million exemption and 55 percent rate.
Currently, the first $2 million of an estate is excluded from the tax, with the remainder being taxed at the rate of 45 percent. In 2009, the exclusion rate will increase to $3.5 million with a 45 percent tax rate, before being repealed for one year in 2010.
More than two million farms dot America's rural landscape. Ninety-eight percent of all U.S. farms are owned by individuals, family partnerships or family corporations. Just 2 percent of America's farms and ranches are owned by non-family corporations. In addition, 86 percent of U.S. ag products sold are produced on farms owned by individuals, family partnerships and family corporations. Non-family corporations account for only 14 percent of U.S. ag product sales.
Alabama Farmers Federation National Affairs Director Keith Gray said, "Death taxes, which can be as high as 45 percent, often force farmers and ranchers to sell land, buildings or equipment needed to operate their businesses."
American Farm Bureau Federation research shows the average estate tax payment in 2000 was the equivalent of one-and-a-half to two years of net farm income. In addition, farm and ranch estates face heavier, potentially more disruptive death tax burdens than other estates. Roughly twice the number of farm estates paid federal death taxes compared to other estates in the late 1990s. Moreover, the average farm death tax was also larger than the tax paid by most other estates.