Permanent Estate Tax Reform Proposed
Earlier this week, I introduced a proposal along with my friend Sen. Jon Kyl of Arizona to permanently reform the federal estate tax. The proposal would permanently set the estate tax rate at 35 percent, with a $5 million exemption amount phased in over 10 years and indexed for inflation. It would also provide a “stepped up basis” for inherited assets. The proposal would be included in a package of other measures intended to provide economic relief for our small businesses.
It’s time to take decisive action on the estate tax, and provide the permanent relief that Arkansas’s forest owners are desperately seeking. Tree Farmers are frequently forced to choose between their forest management objectives and the need to pay their estate tax liability. The tax code shouldn’t be forcing forest landowners who want to be good stewards of the land to make land management decisions that aren’t consistent with good forestry. Uncertainty in the estate tax law has caused incredible difficulties for the families of foresters, farmers and small business owners alike, which is why I have fought for a quick resolution to the issue that is both permanent and fair.
Our bi-partisan proposal provides an election for deceased taxpayers to either retain this year’s estate tax rate, which is zero percent with “carry over basis,” or file under the provisions of the new proposal. If Congress does not act this year, the federal estate tax is scheduled to increase to 55 percent with only a $1 million exemption at the beginning of 2011.
We’ve introduced a similar measure before that received broad bipartisan support and was successfully added to the non-binding congressional budget resolution. Now it’s time for Congress to provide permanent, fair reform for the estate tax, and to do so in a way that rewards, rather than punishes, the investments family forest owners have made in our sustainable private forests.
AFF strongly supports the proposal from Senators Lincoln (D-AR) and Kyl (R-AZ), which will greatly improve the estate tax for family forest owners.
For AFF’s letter of support visit http://www.familyforestaction.org
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