The current Congress and administration appears ready to consider tax increases as one of the major ways to reduce budget deficits. The National Corn Growers Association Public Policy Action Team Chairman Anthony Bush focuses on the estate tax, of which he says NCGA believes should be eliminated for good. Still, there are political realities and the fiscal constraints of the times.
Earlier the U.S. House passed a permanent extension of the estate tax with a $3.5 million exemption per spouse at a 45% rate. NCGA expects the Senate to pass a bill to restore the estate tax later this year, and there is significant support for a larger exemption amount, as much as $5 million, with a lower tax rate of 35%. At the same time, many Senators are concerned about the lack of an index for inflation.
Another very important priority for NCGA grower members is Section 179 Capital Cost Recovery. Since 2003, farmers have been able to write off farm equipment expenses up to $250,000 annually. Without an extension, the investment threshold will fall to $125,000 in 2010 and to $25,000 in 2011. This could prove devastating to both equipment manufacturers and those that supply equipment parts and materials.