The Biden administration’s proposed American Families Plan would fund improvements in education, child care, health care and family leave through a series of tax hikes, including raising the capital gains tax.
One proposal that would affect farmers in particular would eliminate the so-called “stepped-up basis” that calculates capital gains taxes on inherited property based on its value when the owner died, not on the amount they paid for the property years earlier.
“Currently, it’s not in the bill, fundamentally because business and agriculture were very vocal on opposing it,” Nebraska Farm Bureau President Mark McHargue told The Center Square. “But there have been some representatives talking about putting it back in.”
In a recent opinion piece in the Wall Street Journal, U.S. Agriculture Secretary Tom Vilsack wrote that the stepped-up basis protects investors more than farmers and ranchers.
“That’s just absolutely untrue,” McHargue said.
Eliminating the stepped up basis has been in and out of the bill as the legislation progresses, McHargue added.
“I think we need to be very cognizant that at any point it might gain traction and they would throw it back in,” he said. “We can’t let that happen.”
The legislation also proposes raising corporate income taxes, which would affect farmers who have incorporated their farms, McHargue said.
“In general, this administration does not seem to value agriculture,” he said. “There have been multiple proposals coming out of this administration that are not sensitive to agriculture. This is very different from the prior administration. This administration has not been responsive to our request for both information and significant meetings.”
McHargue said the Biden administration has not provided clarity on numerous other tax proposals, including a methane tax and climate environmental provisions.
“We can’t get clarification on what they are or how they would be implemented,” he said. “That’s very indicative of this administration.”
