The House of Representatives on Dec. 3 passed the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009 (H.R. 4154) to make the current estate tax rate and exemption levels permanent. The vote was 225-200. The current top tax rate is 45 percent, with an exemption for individuals whose assets are valued at less than $3.5 million at the time of their death.
The legislation now moves to the Senate where business and agriculture groups will push for lower rate and higher exemption. AEM supports full and permanent repeal of the estate tax. If no action is taken, the estate tax will be completely eliminated for 2010 and then revert back to its original levels for 2011 and beyond, a rate of 55 percent and exemption of $1 million.
On Dec. 9, the House of Representatives voted 241-181 to extend a variety of popular tax provisions that are set to expire at the end of the year. AEM worked with industry partners and Rep. Earl Pomeroy (D-ND), member of Ways & Means Committee, to ensure the continuation of the five-year depreciation schedule for agricultural equipment was included in the package. Without the extension, the depreciation schedule will revert to seven years, eliminating tens-of-millions in farm income in the process. View AEM's letter to Rep. Pomeroy
The package also included an extension of the research and development tax credit. To pay for the $31 billion package, the House bill would tax "carried interest" – the share of profits that investment fund managers are allowed to keep as part of their compensation – at ordinary income tax rates, rather than the much lower capital gains tax rate. Currently, ordinary income tax rates are as high as 35 percent, while the top tax rate on capital gains on investments held more than one year is 15 percent.
The legislation now moves to the Senate where it is expected to pass before year's end.
Related Link: http://www.aem.org/GPP/Letters/Files/Ag Eq Depreciation 9-14-09.pdf
Source : Association of Equipment Manufacturers