The American Soybean Association and each of ASA’s 26 affiliated state soy associations are among more than 300 ag groups calling on lawmakers to protect family farms by maintaining stepped-up basis and other critical tax provisions as committees consider implementation of Biden’s Build Back Better legislation this week.
In a letter to leaders of the Senate Finance Committee and House Ways and Means Committee, also signed by each of ASA’s 26 state affiliates, the groups underscored how the proposed tax changes would have dire consequences for U.S. agriculture.
“There are more than four times as many farmers and ranchers aged 65 and older as there are those under the age of 35, and these individuals own more than 40% of agricultural land in the United States,” the groups state in the letter. “With more than 370 million acres expected to change hands in the next two decades, the policies Congress enacts now will determine agricultural producers’ ability to secure affordable land to start or expand their operations.
Regardless of whether a business has already been passed down through multiple generations or is just starting out, the key to its longevity is a continued ability to transition when a family member or business partner dies.”
ASA and other ag groups continue to stress that any changes to long-standing tax code provisions, including stepped-up basis, like-kind exchanges and the 199A Small Business Deduction, would create a massive, deferred tax burden on family farms and have the potential to severely decrease farm equity.
“For agricultural producers, carrying on the legacy of our predecessors and setting the next generation up for success is critically important,” the groups concluded in the letter. “It is with this in mind that we urge you to preserve the federal tax provisions that have long-supported American agriculture.”
Following the letter, no changes to the stepped-up basis that would affect family farms were included in the House version of the reconciliation bill.
“Family farmers who feed, clothe and fuel this country should be given every opportunity to pass on their livelihoods to the next generation,” Rep. Angie Craig, a member of the House Ag Committee, said. “That’s why, earlier this year, I warned House leadership not to make changes to the stepped-up basis that could negatively impact the next generation of farmers. I am glad that our hard work and persistent advocacy on behalf of Minnesota family farmers has paid off – and that changes to the stepped-up basis that would hurt our family farmers have been left out of this House package.”