is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist

$900 billion tax package: estate tax, biofuel provisions

Tax package passes Congress. Includes more generous estate tax provisions. Includes biofuel/ethanol incentives. Farm groups happy with legislation.

The $900 billion tax package negotiated by the White House and Republican leaders passed a lame-duck Congress and was signed into law by President Obama on Dec. 17. The bill’s passage came with a generous dose of rancor.

Many House Democrats were unhappy when it was revealed the deal included another two years of Bush-era tax cuts for the wealthiest Americans along with generous estate tax revisions (providing a $5 million exemption and maximum rate of 35 percent). An amendment to pull the estate tax portion of the legislation failed on a 233 to 194 vote.

On the Republican side, legislators anxious to cut government spending, and goaded by the Tea Party, were displeased with the bill’s Obama-pushed stimulus spending. In the end, the bill passed the House 277 to 148.

“The tax packages signed today by President Obama will reauthorize ethanol tax credits and reinstate the biodiesel tax credit, which will help bolster efforts to transition our country to a clean energy economy,” said Agriculture Secretary Tom Vilsack. “Ethanol and biodiesel production is critical to continuing the growth of our domestic fuel industry that is reducing our dependence on foreign oil while creating green jobs from renewable sources and adding opportunities for people in rural communities throughout the country.

“The tax package will also extend tax incentives through 2011 for farmers, ranchers and forest owners who voluntarily conserve their lands through donation of a conservation easement. Providing this tax incentive will increase conservation of our working lands and, in so doing, support our rural economy. As part of the president’s America’s Great Outdoors Initiative, USDA, the Department of Interior, the Environmental Protection Agency and the Council on Environmental Quality held listening sessions across the country to hear Americans ideas on what we could do to advance conservation in this country. Providing tax incentives for working lands conservation was one of the ideas that we heard repeatedly from landowners and conservationists during those listening sessions.”

For more, see Obama administration makes massive biofuel push

For many agriculture groups, passage of the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” was welcome. Besides the aforementioned estate tax changes, the bill also provided extensions of biofuel tax incentives (lobbied for heavily by corn, soybean and ethanol interests) and included lower capital gains and income taxes.

Biodiesel tax credit retroactive

“Retroactive extension of the biodiesel tax credit through Dec. 31, 2011, represents a significant legislative achievement on a key ASA priority,” said Alan Kemper, American Soybean Association (ASA) P\president and soybean farmer from Lafayette, Ind. With the biodiesel tax credit defunct for 349 days along with the resulting loss of some 40,000 jobs, “soybean farmers greatly appreciate the work of Congress and the (Obama) administration to get this legislation passed before the end of the year.”

In a statement, the ASA claims the $1 per-gallon biodiesel tax incentive “is structured in a manner that makes biodiesel more competitive with petroleum diesel fuel in the market place. Absent the tax incentive, biodiesel is more expensive than conventional diesel fuel.”

For more, see Biofuels without credits?

2010 biodiesel production decreased over 35 percent from 2009 levels. Further “the biodiesel tax credit has a direct impact on jobs and is critical to supporting the biodiesel industry, a major market for U.S. soybean oil and a key factor in supporting domestic soybean prices” recently.

“It’s been a long process and ASA has worked tirelessly since the tax credit’s expiration to get it reinstated,” Kemper said. “ASA farmer-leaders have met with members of Congress on numerous occasions, supported by ASA members, the National Biodiesel Board, and supporters who have responded … by calling and emailing their representatives in an effort to get a retroactive extension of the biodiesel tax credit passed.”

Environmentalists: 'fundamentally unjust'

There is little fence-straddling regarding the legislation. Calling the tax bill “fundamentally unjust,” Kate McMahon of Friends of the Earth charged Congress had “slipped a wasteful $6 billion giveaway to the dirty corn ethanol industry into this bill.

“An unprecedented coalition of taxpayer, libertarian, environmental, humanitarian, industry, agricultural, faith and progressive advocates united to oppose the extension of corn ethanol subsidies, but Congress lavished this gift on the corn ethanol industry anyway. This wasted money will line the pockets of polluting corporations while American families can barely afford to put food on the table.”

Unsurprisingly, the National Corn Growers Association (NCGA), which has long said extension of the ethanol blender’s credit and estate tax reform was at the top of its agenda, was unmoved by environmentalists’ arguments. Failure to renew the tax breaks “would have done much to harm our nation’s rural economy and the future of America’s farms,” said Bart Schott, NCGA president and North Dakota corn farmer.

“The estate tax reform will allow greater flexibility when planning for the future and farmers won’t have to worry about losing their land to pay an inheritance tax,” Schott said.  “Farmers now have a better ability to pass their land onto the next generation and we can keep America’s farms in our families.”

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.