The most pressing issue for America’s farmers and ranchers in Congress is the prompt passage of legislation to provide estate tax relief, keep capital gains tax rates and extend other important tax provisions that expired at the end of 2009 or are set to expire at the end of 2010, according to American Farm Bureau President Bob Stallman.
“Farm Bureau calls on Congress to act quickly to pass tax legislation when it returns after the election in order to avoid the economic damage that will be caused by tax increases and the uncertainty that surrounds the tax code,” Stallman wrote in a letter to members of the House and Senate on Oct. 4.
“For farmers and ranchers, passage of estate tax relief is the single most important tax issue left unresolved by Congress,” Stallman wrote.
“Farm Bureau believes there should be an exemption large enough to exclude farms and ranches from estate taxes and should be indexed for inflation and be transferable to a spouse,” Stallman told lawmakers.
“Farm Bureau supports a $5 million exemption and top rate of 35 percent,” Stallman wrote.
In his letter, Stallman said Farm Bureau supports continuation of the 15 percent capital gains tax rate. He emphasized the impact of increased capital gains taxes on farmers and ranchers will be “severe” because the average amount of capital gains they report is about 50 percent higher than the average taxpayer and represents 20 percent of the total adjusted gross income reported by farm households.
“A 5 percent increase in capital gains taxes is punitive and discourages investment in our industry,” Stallman wrote.
Farm Bureau also opposes an increase in individual tax rates.
“Most farmers and ranchers file taxes as individuals, and any increase in individual income tax rates will impact both their businesses and the disposable income they have to care for themselves and their families,” Stallman wrote.
“The farm and ranch sector can help stimulate the economy, assist those in need, and preserve open space when agricultural producers’ incomes allow them to do more than just cover necessary expenses. This is why Farm Bureau supports the extension of tax provisions that provide incentives to upgrade operations, donate food and preserve farmland. These provisions include: the five-year depreciation for farm business machinery and equipment, an enhanced charitable deduction for donated food and an enhanced tax deduction for donating a conservation easement,” Stallman wrote.