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A full 47% of Iowa farms could be affected by the new rates for the estate tax on January 1, says Iowa Senator Chuck Grassley. As it stands the estate tax provides a $5 million exemption and a 35% taxable rate after that. But after December 31, the tax is set to drop back to its levels in 2001; an exemption of just $1 million and a taxable rate of 55%. For the average Iowa farm, that’s bad news.
The last best hope to mitigate the taxes is for Congress to take up the issue in its discussions on the fiscal cliff and the farm bill. Only a small fraction of Iowa farms will continue to be affected should the estate tax remain where it is.