WASHINGTON, DC -- Recent proposed tax changes to eliminate stepped-up basis and decrease the estate tax exemption have many in the agriculture industry worried about the negative effects of implementing these changes. Highlighting the concerns of the farming community, Senate Agriculture Committee Ranking Member John Boozman (R-AR) and House Agriculture Committee Ranking Member Glenn “GT” Thompson (R-PA) released a report conducted by the Agricultural Food and Policy Center (AFPC) at Texas A&M University outlining the “Economic Impacts of the Sensible Taxation and Equity Promotion (STEP) Act” and the “For The 99.5 Percent Act on AFPC’s Representative Farms and Ranches.”
The AFPC report analyzes these two pieces of legislation introduced in the Senate and their impact on the tax liabilities of family members when farms and ranches are passed down from one generation to the next. AFPC conducted the study utilizing its database of 94 farms in 30 different states.
According to the report, if both the STEP and For the 99.5 Percent Acts were enacted, they would cumulatively raise taxes an average of $1.4 million per farm on 98.5 percent of the representative farms.
“The proposed changes to these long-standing tax code provisions are troubling for the U.S. rice industry, and USA Rice opposes any changes to the tax code that would penalize farmers or impede their ability to farm with their families,” said Ben Mosely, USA Rice vice president of government affairs. “The results of this study are shocking but straightforward – the incredible tax liabilities that these proposed bills would impose would cause multi-generational, family farms, and related agribusinesses to wither and die.”
USA Rice is among a list of signees in a
letter sent on May 10 to Congressional leaders opposing these tax changes (see
USA Rice Daily, May 13, 2021).