Op-Ed: The Holidays are here and the Duck is Lame
By Bob Stallman-Its official, the holidays are upon us. We
narrowly escaped the rapid fire of election ads and weren’t even finished with
the Thanksgiving meal before being fa-la-la-la-la’d with luxury cars wrapped in
bows and soft drink-swigging polar bears. As the commercials indicate, December
is a time for celebration and giving (and receiving).
In the political arena, on the other hand, December is
typically a down time. This especially holds true when new congressional
members have just been elected and the previous Congress is in lame duck mode.
But, if Congress doesn’t act soon on several significant outstanding items, all
of our gooses will be cooked.
Deck Congress’ Halls
Before we even think about throwing on the Yule Log, we need
to get our legislative house in order. If Congress doesn’t make some important
decisions before Jan. 1, the U.S. economy will drop off what is being termed
the “fiscal cliff.” A plan needs to be hatched to cut $1.2 trillion over the
next 10 years from the deficit, something of which Congress has known about for
a while.
If Congress doesn’t act by the end of the year, automatic,
across-the-board government cuts will kick in, affecting more than 1,000
federal programs, many of which will impact agriculture. For example, all
commodity and many conservation programs will be cut by 7.6 percent next year.
And agriculture research, Extension activities, food safety and rural economic
development programs are just a few others that will be cut by 8.2 percent in
2013. Crop insurance will survive the first year, but will likely face cuts in
year two.
While all Americans will feel the impact, the cuts will
slice right through rural America, which is so dependent on Extension services
and rural development.
With Boughs of Folly
The fiscal cliff will also impact tax breaks. An important
one for farmers is the estate tax, which will revert from a $5 million
exemption at a 35 percent tax rate to a $1 million exemption with a top tax
rate of 55 percent. This could impact one out of every 10 farms and make it
almost impossible for young farmers to carry on their family operations.
The capital gains tax rate will also increase come Jan. 1,
from 15 percent to 20 percent. This, too, will greatly impact farmers. Because
capital gains taxes are imposed when buildings and farmland are typically sold
or transferred to new or expanding farmers, it will become more difficult for
farmers to shed their assets or upgrade their businesses.
Congress has a lot on its holiday plate during the next
several weeks. By the way, did I mention that we still don’t have a farm bill?
But, that’s a topic for another day, maybe over eggnog...
Until then, have a happy and safe holiday season.
Bob Stallman, a rice and cattle producer from Columbus,
Texas, is president of the American Farm Bureau Federation.
#30
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