The
tax's impact on farm and ranch families has been at the center of
the Republican call for a phase-out of the death tax in 10 years.
Montana rancher Lynn Cornwell drove the bill via tractor to the
White House on Aug. 24 while House Speaker Dennis Hastert (R-Ill.)
headed South generate grassroots pressure on the president at a
farmers market in Columbia, S.C.
The
original legislation passed the House, 279-136, and the Senate,
59-39. Neither margin exceeds the two-thirds vote required to
override a veto. But the House Republican leadership has predicted
that all members of their party will vote to override the veto--and
that they will gain nine more votes from members that were not
present the day of the original vote. While 65 Democrats supported
the House bill, concern exists over whether those members will now
change their vote.
If
the override is successful, the bill would reduce all estate tax
rates by about 15 percent over 10 years and lower the bottom
effective rate from 37 percent to 18 percent immediately. In 2010,
death taxes would be eliminated and up to $5.6 million of assets
would retain "stepped-up basis." The stepped-up amount would be
indexed to increase automatically at the rate of
inflation.
Farm
Bureau and other estate tax repeal backers have long argued that the
death tax is actually a double taxation that forces family farmers
and small businesses to sell their property to pay Uncle Sam when a
family member dies. The added cost of estate planning is also an
undue burden—especially for farmers dealing with the worst commodity
prices in decades, said Pat Wolff, an American Farm Bureau
Federation senior director of governmental relations.
"The
death tax affects every farmer because 'Joe Farmer' doesn't know
when he's going to die and what his estate is going to be worth when
he dies," said Wolff. "So…farmers are forced to implement estate tax
planning—that takes accountants, attorneys and life insurance.
That's expensive and some farmers just can't afford it."
The
president and many congressional Democrats have criticized the
estate tax repeal legislation as a "budget-busting bill" that
provides a huge tax cut for wealthy Americans at the expense of
working families. Critics also maintain that only about 2 percent of
estates are subject to the tax each year. They offered an
alternative to immediately ease the tax for small businesses, but
keep it on the wealthiest estates.
But
Wolff said that the targeted relief proposal is similar to the
failed family business estate tax exemption Congress passed in 1997.
"It didn't work then and it won't work now," Wolff said. "There were
too many strings attached. Farmers were afraid to use it and
attorneys didn't understand it."
Stallman
said that families of America's farmers and ranchers deserve an
"all-out repeal of the death tax. The death tax is one that
America's farmers and ranchers should not have to live
with." |