How the “fiscal cliff” tax bill impacts landowners and what to expect the next four years
FOREST LANDOWNERS ASSOCIATION
January 9, 2013
Congress Passes Fiscal Cliff Bill
How the Fiscal Cliff Impacts Landowners
Buried in the 150-page “fiscal cliff” tax bill passed New Year's Day is a last-minute farm bill extension that buys time for Congress to craft and debate an improved measure to establish food and farm policy for the long haul. This means the FLA and our forestry partners will be back in the halls of Congress advocating for measures of importance to private forest landowners and businesses.
In a nutshell, it’s an extension of the bill that we are working under now. It will get Congress and those affected by the Farm Bill until September, when this one will expire, and we‘ll go back to the drawing board this spring and summer.
Mostly what Congress did by passing the fiscal cliff was to make permanent the system that has been in effect for the past two years.
Specifically, this bill locks in place current tax rates for middle class families, provides a permanent patch for the alternative minimum tax (AMT), and holds down the death tax for farmers and ranchers.
Without any action on their part, the tax-free amount would have automatically reverted to $1 million per person, and the rate for most estates would have gone up to 55%. But at the end of the day the only thing the lawmakers actually changed is the gift and estate-tax rate, which has gone up to a top rate of 40% from a maximum of 35% on individual estates valued over $5.12 million indexed for inflation.
“While far from perfect, the proposal protects 99% of taxpayers from scheduled rate increases and provides the certainty necessary for families to plan and businesses to grow by making this tax relief permanent,” said Rep. Glenn Thompson House Agriculture Committee Chairman and supporter of private forest landowners.
The Obama Administration is expected to advance major changes to energy and environmental laws during the President’s second term. There is already a backlog of pending legislation and proposed regulation to work through, and both environmental and industry groups will press for major reforms. A report released by the U.S. Senate Committee on Environment and Public Works Minority Committee enumerates a slew of planned EPA regulations that were delayed or punted on until after the election.