Estate Tax
Estate Tax
Background
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.
Current Considerations
In 2013, if no Congressional action is taken, the estate tax exemption will be reduced from the current $5 million to $1 million, with no spousal transfer. The top rate will increase to 55 percent from the current 35 percent.
STPRA Position
STPRA joins the Farm Bureau and Texas and Southwestern Cattle Raiser’s 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 million exemption be indexed for inflation.
Until our preferred position can be realized, STPRA supports H.R. 1259, entitled “The Death Tax Repeal Permanency Act of 2011”, which permanently establishes the lifetime gift exemption at $5 million.