U.S. pork producers and other farmers deserve more for their hard work than to be “taxed in death, to death,” the National Pork Producers Council (NPPC) said Tuesday in urging Congress to fix the estate tax law.
The estate tax is levied on the net value – less an exemption – of an owner’s assets transferred at death to an heir or heirs. The Economic Growth and Tax Relief Reconciliation Act of 2001 raised the exemption amount and reduced the tax rate over time for the estate tax. Under the 2001 law, the 2009 estate tax exemption was set at $3.5 million with a minimum tax rate of 45%; the estate tax was repealed for 2010.
But unless Congress acts, the 2011 estate tax exemption will revert to its pre-2001 amount of $1 million, with a tax rate of 55% plus an extra 5% for estates valued at over $10 million. Numerous proposals have been introduced in Congress to repeal or modify the estate tax law.
“If the estate tax isn’t fixed, my son could be facing a huge tax bill when he inherits my property and other assets,” says NPPC President Sam Carney, a pork producer from Adair, IA. “Congress needs to significantly reduce the estate tax burden or eliminate it so that family farms like mine can remain in the family.”
NPPC supports efforts to repeal the estate tax or permanently extend the 2001 estate tax law, both of which would support farms for future generations of farmers.
Chris Wall, NPPC assistant vice president for government relations, said at a press conference on repealing the estate tax: “If Congress and the Obama administration really want to protect jobs and repopulate rural America, they ought to eliminate the estate tax, which if not fixed will affect one in 10 farms next year.”
According to the Heritage Foundation, the estate tax raises only about 1% of federal revenues but at a cost to the economy of about 1.5 million jobs a year.