Fiscal Cliff Holdout Worries Nebraska Farmers and Ranchers
Less than a month away until the looming "Fiscal Cliff" fallout, Nebraska farmers and ranchers are bracing for a huge tax hike if Congress and President Obama fail to compromise.
"One of the huge tax provisions that will expire if we go over this fiscal cliff is the inheritance tax," said Sherry Vinton, a Sandhills rancher.
And that tax is very important to these producers. Right now there's a $5 million exemption on the inheritance tax which covers most farms and ranches. However if the tax rates were to expire, the exemption would drop to just $1 million and then the inheritance tax rates bump up to 55 percent.
"With current land values, what this will mean is that any young farmer or rancher that hopes to continue to farm and ranch will probably have to sell land," said Vinton.
Young farmers like Zach Hunnicutt who is trying to make it on his family farm near Giltner, Neb.
"It would be pretty bad for our farm because you would be looking at having the possibility of selling off productive assets, selling off ground, doing some of that stuff just to foot the tax bill," said Hunnicutt.
This non-action from Congress and the President leaves farm officials confused on how to plan.
"Congress has not shown us a lot of work in the past so it's hard to know for sure what will happen," said president of the Nebraska Farm Bureau, Steve Nelson.
This unstable future leaves agriculture producers vying for security.
"We need farmers as well as ranchers and livestock producers need certainty in business. That's the one thing we need to plan," said Vinton.