If you thought the ag lobby only cared about cows, think again. As Kevin Drum explains in his article for the November/December 2009 issue, the farm lobby has it in for any climate bill that would limit their emissions. Not only that, they'll keep on lobbying despite their successes.
The ag lobby isn't just interested in climate, though. They're also very concerned with the estate tax. Major players like the National Cattlemen's Beef Association (NCBA) and the American Farm Bureau have loudly expressed their support for a bill currently in committee, HR 3905, which would keep estate taxes at 2009 levels indefinitely. At 2009 levels, only estates worth $3.5 million ($7 million for couples) or more would be taxed at 45%. If Congress does not pass a bill, the 2009 levels would be suspended in 2010, and in 2011 estate taxes would be back where they were under George W. Bush in 2001: a 55% tax on all estates worth $1 million or more. However, today House Majority Leader Steny Hoyer said he expects the House will amend or revise the estate tax, but he didn't specify exactly how. If Congress passes HR 3905, all estates under $5 million would be exempted from the "death tax," as the NCBA calls it, and the taxation rate would be reduced from 45% to 35%.
So why do farms care about the estate tax anyway? Well, as the American Farm Bureau puts it, "Estate taxes threaten family-owned farm and ranches and the livelihoods of families who make their living in production agriculture." That all sounds very warm and folksy, but the families they're talking about are more likely to be the Hormel family than a small-time farmer. According to the Tax Policy Center, even under the rather generous 2009 estate tax parameters, only 0.2% of deaths will incur the estate tax. In fact, only 100 farms in the entire country would be slapped with an estate tax, and family-owned farms already receive special considerations. For example, they're allowed to evaluate their property at its "current-use value, rather than its fair market value," a reduction allowed up to $1 million, says a 2008 Tax Policy Center report. The few farms that do have to pay the estate tax only have to pay interest for the first five years, then can pay the rest in 10 yearly installments. The exemptions are so extensive that only a quarter of the farms that qualify for the tax actually have to pay it.
As Drum explains in his excellent piece, only the ag lobby would have the chutzpah to get an amazingly sweet deal from the government... and then ask for more. The Wall Street Journal estimates that the estate tax reform will cost the American taxpayers $233 billion over a decade. Benefits to mega-farmers like Hormel? Priceless.