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Biden’s Backdoor Death Tax





Over the past year, our farmers and ranchers went to work every day to feed this country during a time of great challenge and uncertainty for millions of Americans.

 

How does President Biden plan to thank them? By raising their taxes.

 

The so-called “American Families Plan” would create a backdoor death tax on family farms and millions of other small businesses.

 

For decades, our tax code has protected farmland from being double-taxed when it is passed on to the next generation by ensuring that a capital gain is not realized at the time of death and transfer – otherwise known as a step-up in basis. But President Biden needs more money to pay for his $1.8 trillion wish list of big government programs, and he’s expecting hardworking Americans to pick up the check. His tax plan would eliminate step-up in basis and impose a capital gains tax of up to 43.4 percent on unrealized gains valued at over $1 million. President Biden claims that this will only impact the wealthiest Americans. Unfortunately, that’s not the case. 

 

Farmers and ranchers tend to own large amounts of valuable land, equipment, and livestock that makes them appear wealthy on paper, but they often have very little cash on hand. They spend years incurring great costs to make their land more productive, but they never know each year whether they will make any money. By the time that land is transferred to an heir at death it likely will have increased greatly in value, and under President Biden’s plan this would trigger a significant tax burden for the person who inherits it.

 

I experienced this firsthand when my dad died in an accident on our family farm and ranch. Our family was dealing with a tragedy, and suddenly we were faced with a massive death tax bill. We had land, machinery, and cattle, but we didn’t have any money in the bank. Thankfully, we had support from our small community and were able to borrow on our land and pay off that debt. But it took ten years and a lot of sacrifice. Those less fortunate than us would have been forced to sell the family farm to pay that tax.

 

That’s why I got into politics in the first place. And when I was in Congress, I worked with President Trump to repeal the death tax for most family farms in the Tax Cuts and Jobs Act.

 

Our farmers and ranchers face challenges every day that few of us can imagine. They work and sacrifice to feed the world while building something that they can pass on to their kids and grandkids. Another death tax will only make it more difficult for young farmers and ranchers to acquire the land and equipment needed to pursue a life in agriculture. As a result, we will see more farm consolidation and the loss of vibrant rural communities. 

 

Prosperity is not created by higher taxes and bigger government. Leaders like Ronald Reagan and Donald Trump knew that. The American people create our shared prosperity through their independence, hard work, and ingenuity. Washington, D.C. should learn to leave that well enough alone.