By a vote of 257-167, the House of Representatives passed the fiscal cliff legislation after a long day of closed-door discussions on Capitol Hill. The legislation, which was crafted in the Senate by majority Leader Harry Reid (Nev.) and Senate Minority Leader Mitch McConnell (Ky.), passed the Senate earlier in the week by a vote of 89-8.
The legislation, which has been signed by the president, permanently extends the 2001 and 2003 tax rates for individuals with income below $400,000 and below $450,000 per couple, with an increase in tax rates for incomes over these thresholds from 35 to 39.6 percent. The capital gains tax rate for higher incomes will rise from 15 percent to 20 percent.
On the estate tax, the exemption level remains at $5 million ($10 million per couple). Unfortunately, the top tax rate on the value of the estate over the exemption level increases from 35 percent to 40 percent.
ASI Legislative Action Council Chairmen Bob Benson (Ind.) and Gary McGehee (Texas) comment on the critical need that estate tax exemptions remain tied to inflation, maintain the step up in basis and allow for spousal transfers. It was a very real risk that the estate tax could have reverted to a $1 million exemption and a rate of 55 percent and, given the change in land prices of the past decade, would have been a severe hardship on many operations.
The complete package also extends the 2008 Farm Bill until Sept. 30 and authorizes limited disaster assistance for fiscal years 2012 and 2013, with $80 million for livestock indemnity payments, $400 million for the livestock forage disaster program and $50 million for emergency assistance for livestock. Funding for these programs, however, is subject to receiving the money from appropriations committees.
As the 113th Congress begins this month, the Senate Republican caucus voted Thad Cochran (Miss.) as ranking member of the Senate Committee on Agriculture, replacing Pat Roberts (Kan.) in that post.
The House Committee on Agriculture organized as well by naming subcommittee chairs, including Rep. K. Michael Conaway (Texas) to serve a second term for General Farm Commodities and Risk Management. Conaway is schedule to address the sheep industry convention in San Antonio, Texas, on Saturday, Jan. 26.