THE ISSUE

A law passed by the U.S. Congress in 2001 stipulated that the estate tax would end in 2010 and be re-instated in 2011 at the lower exemption levels and higher rates that were in place in 2001. In 2001, the exemption was $1,350,000 for a married couple, and half that for a single person. The maximum tax rate was 55 percent. Between 2002 and 2009, the exemption for a couple was gradually raised to $7 million and the maximum rate was lowered to 45 percent. In 2010, the estate tax exemption was set at $5 million per person and the top tax rate was set at 35 percent for 2011 and 2012. That legislation also put in place a new provision that allowed the unused portion of a spouse’s exemption to be used by a surviving spouse. In 2013, Congress raised the estate tax exemption to $5.25 million from $5 million and increased the top marginal rate to 40 percent from 35 percent.

POSITION

STPRA joins the Farm Bureau and Texas and Southwestern Cattle Raisers Association in supporting a full repeal of the estate tax. We join those groups in asking that until that time, agricultural property be exempted from the estate tax and the $5.25 million exemption continue to be indexed for inflation.

FUTURE ACTIONS

We will support policies that enable property owners to retain and bequeath their properties without the necessity of forced sales or fragmentation.