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WASHINGTON, D.C. - During negotiations on the fiscal cliff, U.S. Senate Republican Leader Mitch McConnell was able to permanently prevent a massive increase in the death tax, which would have especially harmed Kentucky farmers and their families. The low tax, which McConnell fought for since 2001, was made permanent for the first time in the fiscal cliff legislation, which McConnell secured during talks with Vice President Joe Biden.
“I am pleased that we permanently prevented a massive increase in the death tax, which will help Kentucky farmers plan for the next generation. This is good news for Kentucky farmers who want to keep the farm in the family and would otherwise have to sell part or all of their assets or the farm itself to settle their tax burden,” Senator McConnell said.
Without this change, family farms and small businesses valued at $1 million or more would have been taxed at 55 percent starting in 2013. This new deal sets a permanent 40 percent rate on those valued at more than $5 million (indexed to inflation), ensuring that those valued less than $5 million never have a death tax liability. Married couples may be able to benefit even more if their combined assets are valued at less than $10 million.
The Kentucky Farm Bureau commended Senator McConnell for his role on the issue, “Providing Kentucky farm families relief from the federal estate tax has long been a national priority of Kentucky Farm Bureau. We appreciate the diligence of Senate Republican Leader Mitch McConnell to successfully incorporate a permanent $5 million estate tax exemption into the recently-passed fiscal cliff legislation. Even as the fiscal cliff approached, Senator McConnell was determined to keep the interests of Kentucky’s farm families and their financial stability at the forefront of the debate,” said Mark Haney, President of the Kentucky Farm Bureau Federation.