By Ty Higgins, Ohio Ag Net
Estate Tax, commonly referred to as the “death tax,” is one issue that was put into focus as the Ohio Farm Bureau County Presidents visited their Congressmen and women in the nation’s Capitol in early March. Individuals, family partnerships and family corporations own 98% of the country’s 2 million farms. When estate taxes on an agricultural business exceed cash and other liquid assets, surviving family partners may be forced to sell land, buildings or equipment needed to keep their businesses operating.
“Congress has the ability to keep the current rates in place,” said Pat Wolfe, Director of Tax and Rural Development for the American Farm Bureau Federation. “They need to get this legislation on the floor and vote to keep the higher estate tax exemption. We are calling on farmers from Ohio and all over the country to deliver the message to Congress that this is important for farm families.
This is not just an ag issue, as it will have an impact on other small businesses as well.
“Just look around your town and the people that own grocery stores, hardware stores and other types of small business,” Wolfe said. “We’ve come together in a coalition of close to 60 small business groups and we are all working for the same thing – to keep the estate tax rates low and estate tax exemption high.”
The Unemployment Insurance Reauthorization and Job Creation Act of 2010 set the estate tax exemption at $5 million per person and the top rate at 35% for 2011 and 2012. The bill put into place a new provision for 2011-2012 that allows the unused portion of a spouse’s exemption to be used by a surviving spouse.
Without congressional action, in 2013, the estate tax exemption will shrink to $1 million per person with no spousal transfer, and the top rate will increase to 55%.