Agricultural News
Republican Ag Committee Leadership Announces Release of Study Confirming Devastating Impact of Inheritance Tax Code Changes on Family Farmers and Ranchers
Fri, 18 Jun 2021 14:20:06 CDT
The Republican leaders of the agriculture committees in Congress are highlighting a new study that confirms Democrats' proposed changes to taxes on inherited property will have a devastating impact on the next generation of family farmers and ranchers.
Representative Glenn 'GT' Thompson, Ranking Member, House Committee on Agriculture, and Senator John Boozman, Ranking Member, Senate Committee on Agriculture, Nutrition, and Forestry, requested the Agricultural and Food Policy Center (AFPC) at Texas A&M University to analyze two pieces of legislation introduced in the Senate that would change the tax liabilities of family members when farm and ranch estates are passed from generation to generation.
AFPC's study confirms that if enacted, the two bills analyzed the Sensible Taxation and Equity Promotion (STEP) Act, which proposes to eliminate stepped-up basis upon death of the owner and the For the 99.5 Percent Act, which would decrease the estate tax exemption would have a devastating impact on the hardworking families that own and operate farms and ranches.
The STEP Act's proposed changes to stepped-up basis mirror proposals discussed by the Biden administration. If it were to be implemented, 92 of AFPC's 94 representative farms would be impacted with an average additional tax liability of more than $720,000 per farm. Together, the two bills would raise taxes an average of $1.4 million on 98 percent of AFPC's representative farms.
"The livelihoods of American farmers are on the chopping block with proposed changes to stepped-up basis and the estate tax. Many Democrats love to talk about taxing the richest of the rich, but in reality, their proposals would hurt Main Street far more than Wall Street, said Thompson. "The economic harm that will inevitably fall onto on our farmers, ranchers, and producers is too great a burden to gamble with, even with proposed carve-outs and exemptions. The report released today from the Agricultural and Food Policy Center underscores what the industry has known for years new taxes on farmers are more than just an annoyance, they're a generational threat to farm families."
"The data speaks for itself and should give pause to anyone considering this approach as an option to pay for new additional federal spending. If changes of these magnitude are pursued, as some have discussed, the economic harm it will cause will have a lasting impact on rural America," Boozman said.
AFPC maintains a database of 94 representative farms in 30 different states. That data, in conjunction with a farm-level policy simulation model, allows AFPC to analyze policy changes on farms and ranches across the country.
AFPC's study is available online here.
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