After we reported on the likelihood of VEETC just yesterday (what foresight!), it appears that President Obama and Congressional Republicans have reached an agreement on the expiring Bush tax cuts and a myriad of other tax policies. In essence, this tax package would put to rest several of the items that we’ve been working to protect for Illinois corn farmers. The highlights are an extension of the Volumetric Ethanol Excise Tax Credit (VEETC), as well as an answer on estate taxes and a big positive for business expensing.
The agreement is a framework that is being crafted into legislative language with some of the finer details still to be worked out. We are hopeful that passage of the legislation will be easy, but we’re still calling for action from our membership! If you are an ICGA member, or a general corn enthusiast (or maybe you’re super excited about the Child Tax Credit … as a single mom of two, I sure am!), keep reading to find out how you can help.
The agreement will include the following provisions:
- VEETC – Senate Finance Committee Chairman Baucus (D-MT) and Ranking Member Grassley (R-IA) are fighting for VEETC to remain at 45 cents until 12/31/2011, but there is a chance it could be cut to 36 cents. A proposal released by Senator Baucus prior to the announcement of a tax deal would extend through 2011 the blender’s credit would be extended at a rate of 36 cents per gallon, while the small producer’s credit would be extended at a rate of 8 cents per gallon. The Baucus bill also extends through 2011 the existing 14.27 cents per liter (54 cents per gallon) tariff on imported ethanol and the related 5.99 cents per liter (22.67 cents per gallon) tariff on ethyl tertiary-butyl ether (ETBE).
- Biodiesel – The agreement will likely extend the biodiesel tax credit. The Baucus proposal extends through 2011 the $1.00 per gallon production tax credit for biodiesel, and the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2011 the $1.00 per gallon production tax credit for diesel fuel created from biomass.
- Income Tax Rates – The agreement would extend current income tax rates for all individuals for two years and also provide alternative minimum tax relief.
- Estate Taxes – The deal would re-instate estate taxes for two years by imposing a 35% rate on estates worth more than $5 million for individuals and $10 million for couples.
- Capital Gains Tax Rate – The compromise maintains the current rate of 15% for capital gains and dividends.
- Child Tax Credit — The existing $1,000 child tax credit will be extended for two years with the $3,000 refundability threshold established in the Recovery Act.
- Business Expensing – Businesses will be able to expense 100% of their investments in 2011 and also receive a 50% bonus depreciation in 2012.
- R&D Tax Credit – The deal would extend the existing Research and Development Tax Credit for two years.
- Payroll Tax Cuts – This agreement will also include a 2% employee-side payroll tax cut. This will not impact the payroll taxes paid by employers.
- American Opportunity Tax Credit – The agreement would extend for 2 years a partially refundable tax credit of up to $2,500 to cover the cost of college tuition.
If any of this sounds good to you, you might contact your Congressman to let him or her know that you’d appreciate their vote in support of the tax cuts. I’m assuming that you know who your Congressman is, but if not, don’t be ashamed! Just check here.
And once you know who he or she is, you can look up their DC phone number on our [Get Involved] section as well as find some other really great opportunities to get involved in advocating for agriculture.
If you liked this post, check out:
EPA’s VERSION OF A HALLOWEEN DECORATION
WHAT DOES NOVEMBER 2 MEAN FOR IL AGRICULTURE
US MILITARY AND US (IL) AGRICULTURE