The Agricultural and Food Policy Center at Texas A&M University developed a study showing the impact of potential inheritance tax changes. American Farm Bureau Economist Veronica Nigh says the study looks at potential impacts of the Sensible Taxation and Equity Promotion, or STEP Act, and the 99.5 Percent Act.
“The STEP Act announced by Senator Van Hollen proposes to eliminate stepped-up basis upon death of the owner, and the 99.5 Percent Act introduced by Senator Sanders decreases the estate tax exemption down significantly from where it is today. This study looks at if those laws were to go into effect, what the impact would be on farmers and ranchers.”
Nigh says members of the House and Senate Agriculture Committees requested the study.
“Certainly, the ag community has been very interested and involved in the discussions around potential changes to the tax code. So, really, it was a culmination of the ag community being interested, expressing that interest through their grassroots efforts with their elected officials, and then those elected officials asking Texas A&M to take a look.”
The study shows both bills would be costly to farmers.
“AFPC maintains a database of 94 representative farms in 30 states. And so, this took a look at what the impact would be. And it found that if both the STEP Act and the 99.5 Percent Act were simultaneously implemented, 92 of the 94 representative farms would be impacted, with additional tax liabilities incurred averaging $1.43 million per farm.”