Progress Toward Fixing the Estate Tax?
Late on December 2, Senator Max Baucus (D-MT) introduced the Middle Class Tax Cut Act of 2010, which includes some provisions for family forest owners. The Baucus bill would permanently extend the 2009 estate tax rates, which means a $ 3.5 million exemption with a 45 percent tax rate (allowing adjustments for inflation).
It also includes language from the Family Farm Estate Tax Deferral Act (S. 3664), introduced by Senators Feinstein (D-CA) and Crapo (R-ID), which we have been championing for more than a year. These provisions are especially good for Tree Farmers with a management plan.
The bill would allow families that own forests to defer their estate tax owed on land and timber, provided the land stays in the family, stays in forest, and the forest owner has a stewardship plan for the land. This provision is really a win-win as it helps family forest owners keep their land and it helps ensure that more woodland owners are managing sustainably. This all means that the many public benefits that come from well-managed private forests will continue—clean air, clean water, habitat for wildlife, wood products to build our homes, schools and businesses.
The Baucus bill also reduces capital gains tax rates for some taxpayers and extends the conservation easement tax incentives.
However the Senate is far from finished with their tax negotiations. The Senate could vote as early as Saturday, December 4 on this bill, but it’s not likely to pass without further negotiation. We expect the debate to continue into next week and there is no guarantee that the Feinstein-Crapo provisions will stay in or what the other estate tax provisions will look like.
AFF continues to call on Congress to fix the estate tax for America’s family forests—to pass the Feinstein-Crapo estate tax bill and to include a $5 million exemption and a 35% tax rate in the estate tax bill.
