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‘Fiscal cliff,’ estate tax, farm bill of concern to farmers during lame-duck Congress

WASHINGTON—American Farm Bureau Federation President Bob Stallman recently emphasized that Congress needs to act soon on several significant outstanding items. One is the “fiscal cliff.”

“A plan needs to be hatched to cut $1.2 trillion over the next 10 years from the deficit, something of which Congress has known about for awhile,” Stallman said. “If Congress doesn’t act by the end of the year, automatic, across-the-board government cuts will kick in, affecting more than 1,000 federal programs, many of which will impact agriculture.”

For example, he said, all commodity and many conservation programs will be cut by 7.6 percent next year. Agriculture research, extension activities, food safety and rural economic development programs are among others that will be cut by 8.2 percent.

“While all Americans will feel the impact, the cuts will slice right through rural America, which is so dependent on extension services and rural development,” Stallman said.

Also of concern during the lame-duck Congressional session is the need for a new farm bill. “I’m not certain about the prospects,” Stallman said, noting that representatives have said federal farm policy will be brought up. “When they say the issue will be brought up, it doesn’t mean they’re going to pass a five-year farm bill.”

Of greater concern, he said, is that the federal estate tax exemption stands to drop from $5 million to $1 million and that the tax rate could be 55 percent on Jan. 1.

“This could impact one out of every 10 farms and make it impossible for young farmers to carry on their family operations,” Stallman said.

The capital gains tax rate also will increase, from 15 percent to 20 percent. It, too, could have a significant impact on farmers, as capital gains taxes are imposed when buildings and farmland are sold or transferred to new or expanding farmers.

Contact Cyndie Sirekis, AFBF public relations, at 202-406-3649.
Posted in: Estate Tax

 

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