By Jason Skaggs, TSCRA Executive Director, Government and Public Affairs
Will Congress Take this Opportunity to Fix the Death Tax?
At the recent TSCRA fall meeting in Austin there was good discussion on many important federal and state policy issues, but none were as passionate and important as the need for Congress to address the death tax by the end of the year.
In June 2010, we wrote to you about the urgent need for action by Congress on the federal death tax. During that time, Congress was facing a December deadline to act in order to prevent the death tax from reverting back to the catastrophic levels of $1 million per person exemption and a 55 percent tax on anything above that. Sound familiar?
Here we are in 2012 with the same dilemma.
For approximately 215 years, the federal government has relied on estate and inheritance taxes as sources of funding. Proponents of the death tax have frequently advocated that the tax is an effective tool for preventing the concentration of wealth.
Opponents to the death tax, like TSCRA, believe the death of a family member should not be a windfall for the federal government, and that land and assets should be allowed to pass from generation to generation without penalty.
This tension has led to periodic revisions of federal tax laws. In reality, though, what it's really led to is countless hours of wasted time, attorney fees, expensive tax planning and a lot of wasted money on a tax that shouldn't be law in the first place.
Congress ended up voting for a 2-year bill in December 2010 that put a $5 million per person exemption in place and a 35 percent tax for everything over. But what Congress didn't do is stop the death tax from rearing its ugly ahead again in 2012. And here we are again talking about an issue that seems to never die. Some have called it déjà vu; I call it a shame.
If something is not done by the end of the year, many ranchers across the country will have to pay a 55 percent tax to pass their estate to their family and/or continue to pay thousands of dollars in legal fees trying to avoid it. Those who can't pay stand to lose it all.
Congress has a golden opportunity to fix this once and for all, but I think unfortunately the odds are they won't, at least not in a meaningful way.
TSCRA will continue to fight for repeal of this unfair tax on family ranching operations. Until the death tax is fully and finally repealed, TSCRA will support legislation to keep the current 2012 levels, which significantly reduce the burden of the death tax on family ranching operations.
While this and other tax issues will be hot topics in Washington this fall, rest assured that TSCRA is working for you.
Please contact your U.S. Representatives and Senators and let them know how you feel about the death tax. Regardless of who wins this month, every vote will count.
"Back Page — Will Congress Take this Opportunity to Fix the Death Tax?" is from the November 2012 issue of The Cattleman