If Congress doesn't pass an estate tax bill and the president doesn't sign it before Dec. 31, the federal estate tax will revert to a 55% tax rate with a personal exemption of only $1 million.
"That would be crippling for all of America's economy," says Lindsay Reames, assistant director of governmental relations for the Virginia farm Bureau Federation, "since it would affect virtually every small business or farm in the nation."
The Va. Farm Bureau sees an amendment to House Bill 5297, introduced by Sens. Blanche Lincoln (D-Ark) and John Kyle (R-Ariz) that would permanently set the federal estate tax rate at 35%, as a step in the right direction. Reames is urging senators to support the Lincoln/Kyl amendment and move the bill forward.
"While the measure doesn't give farmers all we'd like in this legislation, time is quickly running out," Reames adds. "Farmers need to know what the law is immediately, in order to make their financial and inheritance plans before the current 100 percent exemption expires Dec. 31.
"The uncertainty is what's really hard for farm families. Right now, no one knows how to plan their estates, especially if they want to be able to pass on the farm to their children or relatives."