Estate tax repeal: Is it possible?
Call it what you want to call it – but any time the estate tax, also known as the death tax, comes up in conversation, ears perk up and most in agriculture start paying attention. Well, in the past few days, the topic has started simmering again.
No, we’re not faced with a situation like we were in in 2011 when we faced a very real potential of estate tax levels reverting back to pre-2001 levels when estates worth $1 million were taxed at a 55 percent rate. At the eleventh hour in 2012, Congress passed the American Taxpayer Relief Act that permanently set the estate tax exemption level at $5 million per individual (or $10 million per couple) and established the top tax rate at 40 percent. This legislation maintained popular provisions like the spousal transfer, the step-up in basis and indexed the estate tax for inflation. By and large, while full repeal was the top priority among agricultural organizations, most in the industry seemed appeased by the permanency under the ATRA.
So, for the past couple of years, except for discussions about how the estate tax fits into overall tax reform efforts, the topic hasn’t received a great deal of attention.
Two things this week, however, brought it back to the surface.
First, U.S. Representative Kevin Brady (R-Texas), who has been one of the strongest voices on Capitol Hill advocating for full repeal of the estate tax over the years, was able to top 218-cosponsors on his Death Tax Repeal Act (H.R. 2429). Reaching 218 cosponsors means more than half of the House of Representatives is on board with a full repeal.
This news caused the American Farm Bureau Federation to say now’s the time to act.
“Although permanent law enacted as part of the American Taxpayer Relief Act of 2012 provided significant estate tax relief, repeal is the best solution to protect all farms and ranches from the estate tax," said AFBF President Bob Stallman.
The bill may be headed to the House floor for a vote. Rep. Brady was recently quoted in Forbes saying he appreciated Ways and Means Chairman Dave Camp’s willingness to help secure a floor vote, and he noted that such a vote hasn’t occurred in nearly a decade.
“Our goal – and we are determined to achieve it – is to bury the death tax once and for all,” said Congressman Brady.
That’s the first thing that happened. The second newsworthy nugget this week involves one of the presumed front-runners in the 2016 Presidential election, Hilary Clinton. Over the years, Hilary and her husband former President Bill Clinton have gone on the record supporting the estate tax. Outside the halls of Congress or the White House, though, the Clintons have done the same thing millions of farmers, ranchers, landowners, and small business owners have done – they’ve worked with estate planners to carefully design their estate so as to avoid being hit with the estate tax.
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