Shield farmers from higher taxes for Biden projects, says House ag chair
The Biden administration could “impose a significant financial burden” on farm families with its proposal for stricter application of capital gains taxes, said House Agriculture chairman David Scott on Wednesday. Scott also said any increase in estate taxes “for those taking over farmland is untenable.”
With his letter to President Biden, Scott became one of the highest-ranking congressional critics of the president’s proposal to end the practice of assessing assets, including land, at their current value when they’re passed down to heirs rather than the increase since they were originally acquired. The White House has said it would include an exemption for heirs who keep the farm in operation.
“My understanding of the exemptions is that they would just delay the tax liability for those continuing the farming operation until time of sale, which could result in further consolidation of farmland ownership,” wrote Scott. “This would make it more difficult for young, beginning, and socially disadvantaged farmers to get into farming.”
Very few farm families are obliged to pay estate taxes. There is an $11 million per person exclusion from estate taxes at present; it drops to $5 million per person in 2026 but will be indexed for inflation.
The White House says the “stepped-up basis” now in force for calculating capital gains taxes “allows the wealthiest Americans to entirely escape tax on their wealth by passing it down to heirs,” exacerbating inequality in America.
Scott offered to work with the administration to make sure there is no unfair burden on farm families. Biden’s proposals for large infrastructure improvements and climate mitigation are “admirable, but the brunt of paying for them cannot be borne by the next generation of farmers taking over the land,” he said.
Scott’s letter is available here.