The U.S. House of Representatives voted on Thursday to permanently extend the estate tax, approving a measure that would lock in a top rate of 45 percent on some estates. The vote was 225 to 200.
The House plan would extend the rate on estates worth more than $3.5 million. Married couples can usually exempt estates worth up to $7 million.
Congress, in 2001, decided to drop the estate tax in 2010 before reinstating it in 2011 at the previously higher top rate of 55 percent for estates valued at more than $1 million.
Prior to the passage of this House Bill, 91 national and state agricultural organizations wrote to House Speaker Nancy Pelosi (Calif.) and Minority Leader John Boehner (Ohio), stressing their support of a different bill, the Family Farm Preservation and Conservation Estate Tax Act (H.R. 3524), to help protect family farms.
H.R. 3524 would exclude farm assets from estate taxes for as long as the property remains as a family agricultural operation. The bill also would have protected the environment by exempting properties that are protected by a qualified conservation easement. This would strengthen agriculture in the United States by providing certainty in estate planning for farmers and ranchers who pass their operations to the next generation. Farmers and ranchers would be saved from fragmenting their operations to pay the estate tax, especially during tough economic times.
The American Sheep Industry Association supported H.R. 3524.
The House measure now goes to the Senate, which plans to consider its own version. The two bills would have to be reconciled, passed again by both chambers and signed by President Obama by Dec. 31 to avoid the levy expiring.