With the election quickly approaching, the presidential debate is heating up as the candidates ardently seek to distinguish themselves. Mitt Romney, campaigning in Iowa earlier this week, promised Iowa farmers that he would help them by cutting regulations, increasing trade, lowering energy costs and getting rid of the estate tax on high-value family farms.
Romney promised to abolish the estate tax-which conservatives refer to as the “death tax”-as he reminded the crowd of Obama’s plan to levy a 45 percent tax on individual estate worth over $3.5 million. That number is a decrease from the current $5.2 million exemption, which is set to expire at the end of 2012. Obama’s proposal failed when it could not gain the support of some Senate Democrats.
The estate tax has been a longtime hot-button issue for Republicans, but holds more significance this year, when the expiration of Bush-era tax cuts threaten to push the exemption amount down to the point where it could affect middle-class small business owners and family famers. Farm economy experts, however, say the tax a minor issue for the majority of Iowa farming operations.
Both Republicans and Democrats are concerned that the decrease in the exemption amount could force farmers with modest operations to sell part of their property just to pay off their estate taxes.
For some people, working with the uncertainty of estate tax exemption means engaging in careful and calculated gifting. At this point, there isn’t much time left in the year left to take advantage of the high exemption amount. Those who feel they could benefit from strategic gifting ought to act quickly before it is too late.
Source: CBS News, “Romney pushes opposition to “death tax” in Iowa,” Sarah Huisenga, October 9, 2012