January 3, 2013
www.gfb.org
Vol. 31 No. 1
ESTATE TAX, FARM BILL ADDRESSED WITH PASSAGE OF LATE TAX BILL In New Year’s Day votes in both chambers, Congress passed The American Tax Relief Act of 2012 to avert the so-called “fiscal cliff ”. The bill included an extension of the 2008 farm bill. The bill, H.R. 8, was opposed in the House by nine of Georgia’s 13 delegates. The House passed the bill by a 257-167 margin. In the 898 Senate vote, both Sens. Saxby Chambliss and Johnny Isakson voted for it. The 2008 farm bill is extended through Sept. 30, 2013, with some notable exceptions. This included authorization for most commodity programs, including direct payments, but did not include payments under the Supplemental Revenue Assurance Program (SURE). Peanuts grown in the 2013 crop year will be subject to the same commodity provisions as in the 2012 crop year. The dairy product price support program is extended until Dec. 31. While the commodity programs are authorized under the bill, it is important to note that they are not funded under the bill; funding for the programs will have to be issued through the Appropriations Committees. In a prepared statement, American Farm Bureau President Bob Stallman called the farm bill extension “little more than a stop-gap measure. We are glad that a measure is in place for most of this year, but we are disappointed that Congress was unable or unwilling to roll a comprehensive five-year farm bill proposal into the fiscal cliff package. Now, it will be up to the new 113th Congress to put a new farm bill in place, and we will continue to insist on the kind of reforms that were included in the proposals approved by the Senate and the House Agriculture Committee during the 112th Congress.” The federal estate tax was also permanently extended, avoiding a reversion to a $1 million exemption with a 55 percent top tax rate that was scheduled to take effect on Jan. 1. Instead, the exemption remained at $5 million per person and will be indexed for inflation, while the top rate was increased from 35 percent to 40 percent. President Barack Obama had indicated he would sign the bill into law but he had not done so at press time. The bill increases income taxes for individuals making more than $400,000 per year ($450,000 for couples), but avoided tax increases for those beneath the $400,000 threshold. The 2 percent payroll “tax holiday” enjoyed by most Americans since 2010 was allowed to expire. The bill increases the Alternative Minimum Tax (AMT) exemption for 2012 to $50,600 for individuals and $78,750 for married couples filing joint returns. The AMT exemption is also indexed for inflation.