Dairy Producers Urge Congress to Pass Estate Tax Reform in Lame-Duck Session
December 3, 2010
Dairy Producers Urge Congress to Pass Estate Tax Reform in Lame-Duck Session
NMPF joined nine other farm and agriculture organizations at a National Press Club news conference on Tuesday, November 30 to urge members of Congress to address estate tax reform during the lame-duck session.
Dairy farmer Billy French (pictured at left) of Maurertown, Va., who operates French Bros. Dairy, a 125-head dairy and a 200-head cow/calf operation, spoke on behalf of NMPF about his experiences inheriting a multi-generational farm.
French, whose home farm has been in his family since 1872, explained how estate planning has been essential to his family's partnership, especially in a large family where French is one of nine siblings. "Being able to plan for transfer of assets to the next generation is essential to the success of a business like ours," French said.
When French's father died in 2003, his estate was under the current exemption amount, which was important for the continued success of the farm's operations. However, it has been difficult for French and his wife to start planning for the transfer of the assets to their four children with the uncertainty of estate tax reform right now.
"We realize we need to start planning for transfer to the next generation, but the uncertainty is holding us back," French said. "I especially don’t like the position we are in during 2010 without the stepped-up basis. Without it, paying the estate tax on the current value of land assembled by generations before us will be very hard to do in this dairy economy."
"Families like ours in this situation often have to sell land to pay estate taxes," French continued. "That's no way to help maintain the family farm that is the backbone of U.S. agriculture."
If Congress does not act before December 31, 2010, the current estate tax law (also known as the death tax) will revert to the 2001 rate with an exemption level of $1 million and a 55% tax rate. That rate would negatively affect the ability to pass farms, ranches, and small businesses from one generation to another.
NMPF supports permanently raising the exemption level to no less than $5 million per person, and reducing the top rate to no more than 35%. The exemption should also be indexed to inflation, provide for spousal transfers, and include the stepped-up basis. Dairy farmers may contact their members of Congress through Dairy GREAT to explain why they should vote for estate tax reform.
