If Congress fails to rewrite estate tax law, it "will cause many viable agricultural operations to disappear," according to John McCoy, president of the Farm Equipment Manufacturers Association. McCoy, who recently was elected FEMA president, is president and owner of Orthman Manufacturing Inc., of Lexington.
FEMA has joined a large coalition of farm and commodity groups in renewing its call for Congress to enact legislation that would significantly lower federal taxes on large estates that are valued at over $10 million.
McCoy says that under current tax law, estate taxes are non-existent this year, but would snap back in 2011, with estates valued at over $1 million being subject to a top tax rate of 55 percent. The coalition is calling for permanently raising the estate exemption to no less than $5 million per person and reducing the top rate to no more than 35%.
The groups also want the $10 million exemption indexed to inflation and for the government to continue to allow heirs to claim a stepped-up basis so they can avoid capital gains taxes when they sell the assets from the estate.
McCoy adds, "This important legislation is vital to the sustainability of our farmer customers' operations and therefore has significant value to our Farm Equipment Manufacturers Association Members."
FEMA is an international trade organization representing more than 310 manufacturers of specialized farm equipment, more than 250 industry supplier companies and 39 marketing firms. It is headquartered in St. Louis, Mo.