Biden tax plan puts U.S. farms at risk, says Boozman
Farmers could face huge tax bills if President Biden succeeds in raising capital gains tax rates and closing a loophole for legacy assets such as farmland, the commission’s senior Republican said senatorial agriculture. The proposals are unpopular in farm countries, and some Democrats in Congress, including the chairman of the House agriculture committee, say family farms and small businesses should be protected from potential tax increases.
The White House said the heirs would not have to pay capital gains tax if they kept the farm or business going. USDA analysis indicates that 98 percent of farm estates owe no tax in this case and that the remainder of tax debt would be on their non-farm assets.
In an essay published by Fox News, Arkansas Sen. John boozman said the administration was “indifferent” to farmers’ concerns about tax code changes. “The value of farmland has increased an average of more than 360 percent, or nearly $ 2,500 an acre, since 1990,” wrote Boozman, the Republican leader of the Senate Agriculture Committee. “This means that farmers and ranchers would likely face high capital gains taxes when selling an inherited asset if the base increase were removed.”
Republicans in agricultural states were due to expand their attack on Biden’s tax package on Tuesday.
A key issue is what is known as the base increase, a feature of the tax code for decades, which has stipulated that assets will be valued at their present value when inherited, rather than their appreciation since. their acquisition, which significantly reduces liability tax. The loophole “allows the richest Americans to completely escape tax on their wealth by passing it on to heirs,” the White House said. Biden says his plan would tax wealth at the same rate as income from work.
Eliminating the enhanced base combined with a higher capital gains tax rate would increase federal tax revenues by $ 113 billion over 10 years, said a Penn wharton analysis, much less than some estimates. “Legal avenues of tax evasion limit the potential for income generation from the taxation of capital gains,” he said.
House Agriculture chairman David Scott said earlier this month he had “serious concerns” that the tax proposals “could hurt our family farmers, ranchers and small businesses.” In particular, the “step-up in base” is an essential tool allowing family farms to continue from generation to generation. ”
Over 90 percent of large-scale producers who participated in a Purdue University A May survey said they were “somewhat” or “very” concerned about the possible elimination of the enhanced base for inherited land. They had the same level of concern about possible inheritance tax changes. America’s largest farm group is campaigning for the repeal of the inheritance tax.