“While I appreciate that the proposal provides for some exemptions, the provisions could still result in significant tax burdens on many family farming operations.”
Congressional Democrats are getting an earful from their constituents opposed to tax increases and in turn, the members are expressing their tax-hike reservations to President Biden.
This week House Agriculture Committee Chairman David Scott (D-Ga.) wrote a letter to Biden noting his strong opposition to Biden’s proposal to take away stepped-up basis:
Dear President Biden,
As Chairman of the House Agriculture Committee, I applaud the historic investments you propose in the American Jobs Plan and American Family Plan, which are critical as we continue to recover from the COVID-19 pandemic. However, I have serious concerns about proposed changes in tax provisions that could hurt our family farmers, ranchers and small businesses.
I am very concerned that proposals to pay for these investments could partially come on the backs of our food, fiber, and fuel producers. In particular, “step-up in basis” is a critical tool enabling family farming operations to continue from generation to generation. The potential for capital gains to be imposed on heirs at death of the landowner would impose a significant financial burden on these operations. Additionally, my understanding of the exemptions is that they would just delay the tax liability for those continuing the farming operation until time of sale, which could result in further consolidation in farmland ownership. This would make it more difficult for young, beginning, and socially disadvantaged farmers to get into farming.
While I appreciate that the proposal provides for some exemptions, the provisions could still result in significant tax burdens on many family farming operations. I look forward to working with you as negotiations continue. We must ensure that we protect our family farmers, ranchers and small businesses that keep our rural communities alive.
A PDF copy of the letter can be found here.