Veneman Promotes Administration Tax Record

April 16, 2002

In a news conference with farm broadcasters Monday, Agriculture Secretary Ann Veneman said farmers and ranchers will benefit from tax provisions and economic stimulus initiatives enacted by Congress during the first 15 months of the Bush administration.

Veneman outlined how the Economic Growth and Tax Relief Reconciliation Act of 2001, signed by Bush last June will help farmers and ranchers. The act reduces federal income taxes by lowering marginal income tax rates, expands the child tax credit, addresses the marriage penalty, increases education incentives and allows higher contributions and great flexibility for individual retirement accounts and pensions. Farmers and ranchers pay approximately $26 billion annually in federal income taxes.

"About 85% of U.S. farmers and ranchers will benefit from the many changes in the tax laws," Veneman said. "We estimate that farmers and ranchers saved $1.2 billion on their 2001 income taxes. And, over the next 10 years, farmers and ranchers will save nearly $20 billion in federal income taxes."

Another important part of the act is the phase down and out of death taxes. "The tax relief act greatly reduced the number of farm estates affected by the death tax and the amount of taxes paid by farm estates," Veneman said. "This will make it easier to transfer farm property from one generation to the next and help keep family farms in the family."

The death tax reduces estate tax rates and increases the dollar amount of property exempted from tax from the current $675,000 to $3.5 million by 2010. "Prior to the act, about one in every six farm estates were required to file an estate tax return," Veneman said. "We now expect about one in 10 farm estates will be required to file a return in 2002, declining to only one in 25 in 2006. Over the next decade,farmers and ranchers are expected to save about $3 billion infederal estate taxes."