House Ag Committee Chair David Scott (D-GA) sent a letter to President Biden regarding his American Jobs Plan and American Family Plan. While he supports the historic nature of the plans, he’s unhappy with some of Biden’s tax proposals to help pay for the plans.
Scott says the tax plan will likely hurt farmers even though the tax liability would be put off as long as a farm stays within the same family.
“In particular, the stepped-up basis is a critical tool enabling family farming operations to continue from generation to generation,” Scott says in the letter. “The potential for capital gains to be imposed on heirs at death of the landowner would impose a significant financial burden on these operations.”
As he understands the exemptions, they would delay the tax liability for those continuing the farming operation until the time of sale, which could result in further consolidation in farmland ownership. That would make it more difficult for young or socially disadvantaged farmers to get into the business.
“While I appreciate that the proposal provides for some exemptions, the provisions could still result in significant tax burdens on many family farming operations,” Scott adds in the letter to Biden.