Congressman Jim McDermott, D-Wash., is proposing to extend the current reach of the estate tax beyond 2012. His legislation would reduce the exemption from $5 million to $1 million and raise the rate from 35% to 55%.
South Dakota Cattlemen's Association President Bill Slovek says it would be devastating for agriculture if that were to make it through Congress.
"With all the inflation we've had in the last decade, the price of land the price of commodities; you wouldn't have very much land and you'd be over that $1 million threshold," Slovek said. "And basically what they're saying is you've got to buy back 55% of that land from the federal government that you've already paid for one time and that would be impossible at these levels of prices."
The estate tax is set to revert back to 2001 levels after next year, though Congressional Republicans have introduced legislation to repeal it. Slovek says repeal of the estate tax is what his group would like to see.
"Our ultimate goal would be to repeal it for production agriculture as long as it stayed in production agriculture," Slovek said. "And if we can't get that then we've got to get the exemptions raised, that's our first and second goal I guess."
According to Slovek, McDermott's bill would also unify estate and gift taxes. That means taxpayers would only have a single exemption of $1 million for their estate and most gifts.