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2011-01-13

Proposed tax deal could benefit ranchers & farmers

Special to the Courier In

A deal being hammered between the White House and Republican legislators could keep estate taxes from skyrocketing in 2011. Property and business owners had been dreading the estate tax reinstatement in 2011, which originally was to have reinstated a 55 percent levy on estates above the $1 million threshold.
According to the latest proposals on the negotiated tax package, the tax threshold for estates will be raised to $5 million, and the corresponding tax rate lowered to 35 percent for two years.
“Although this is not the desired repeal of the estate tax, this higher tax threshold and lower tax rate could protect the legacy of more family businesses, farms and ranches,” said Bill Hyman, executive director of the Independent Cattlemen’s Association of Texas (ICA). “The value of land, outbuildings, equipment and livestock has escalated, and many small family farms or ranches are now worth $1 million or more. These operations, however, are not ‘cash cows.’ When families must pay inheritance taxes, it forces them to parcel and sell off property or liquidate an entire operation, destroying a way of life.”
Hyman continued, “The one-year reprieve from estate taxes (2010) came at the right time, but there has been great concern about the tax reinstatement in 2011. The proposed tax deal would raise the ‘starting line’ for estate taxes to $5 million and keep the tax rate at a more sensible 35 percent for two years. The result: it could keep more business operations in the family.”
He said other aspects of the proposed tax deal include:
• Extending jobless benefits for another 13 months for long-term unemployed
• Dropping the employees’ Social Security deduction from 6.2 percent to 4.2 percent for one year to help stimulate spending
• Extending the Bush-era income tax cuts for two more years.
“We will be closely watching as the proposed tax package makes its way through the legislative process, as support of the entire Congress is needed to make this deal a reality,” said Hyman. “Our holiday wish is that this deal is ironed out before the ‘lame duck’ session expires on Jan. 1.”
For more information, visit http://icatexas.com or call the association headquarters in Lockhart at 512-620-0162.