What is in this article?:
- Colin Woodall Provides A Nov. 6 Election Wrap-Up
- Financial outlook
What will a second Obama term will look like? The National Cattlemen’s Beef Association’s point man in Washington, D.C., Colin Woodall, says most worrisome is the prospect of new EPA regulations.
On the tax side, Woodall says the estate tax is top of mind. With the so-called “fiscal cliff” of automatic tax hikes and spending cuts looming in the new year, Woodall says he’s “pretty optimistic” that congressional leaders will enact a blanket extension of all the programs. The big question is the income threshold for continued tax cuts.
“There are hard camps on both sides of the fiscal cliff issue. I think at the end of the day, however, neither party wants to be responsible for what would be one of the largest tax increases in American history. That is why I think we’ll ultimately see some sort of bargain.”
The current estate tax calls for a $5-million individual exemption and a 35% tax rate, with a step up in basis adjusted for inflation. If steps aren’t taken to address the expiring rule, the individual exemption would fall to $1 million and a 55% tax rate on Jan. 1, 2013. “Our hope is to get as long of an extension as possible on the estate tax in order to provide taxpayers with a little certainty.
“But there's also the option, and Congress is good at this, of just kicking the can down the road into the new Congress and trying to do something about all these issues in 2013. And they have the mechanism; they could change all of the dates around sequestration; they could do a short-term extension of the tax rates; there are a lot of things they could do to just buy themselves some time. We should have a pretty good idea what will happen by the end of November,” Woodall says.
Estate Planning: Important Year-End Tax Implications For Ranchers
Woodall says he’s struck by how little change the election brought to Washington, D.C.
“After all this effort and money, there really wasn't that much changed. The general dynamic, the general control, the general philosophies stayed pretty much like we've had the past two years – Obama in the White House, the GOP controlling the House and Democrats the Senate. That’s good and bad for us. It's bad because we're not going to have the opportunity to see some major reform like we'd hoped – major tax reform, major ESA reform. That's just completely off the table now.
“But at the same time, it's the same dynamic we've been working with the past two years so we know how to navigate these waters; we know what to expect. And I think that will help us take out some of the surprise in figuring out what the next two years will look like in Washington.”
Another positive is that the cattle industry's influence in Congress has actually grown a little bit with the latest election results. Woodall points to two new additions in the new Congress – Rep. Ted Yoho, a Florida DVM and rancher, and Sen. Deb Fischer, a Nebraska cattle producer.
“We're pretty excited that we have a couple more of our own that are actually here in the halls of Congress beginning in 2013,” Woodall says.
His advice to cattle producers is to “get engaged in the process. Whether that's through your county, state or national association, join them, make sure you know what's going on, and get engaged with the local offices of your members of Congress. Go in, introduce yourself, invite them out to your farm and ranch and built that relationship. What you'll find is that they will come to you for info, because at the end of the day, these people want to know who their constituents are,” Woodall says.