Friday, June 04, 2021

Democrat who chairs House Agriculture Committee opposes Biden plan for stricter application of capital-gains taxes

Rep. David Scott, D-Ga.
The chairman of the House Agriculture Committee told President Biden this week that he has "serious concerns" about Biden's proposal to apply capital gains taxes more strictly, saying it "could hurt our family farmers, ranchers and small businesses."

In a letter to Biden, Democratic Rep. David Scott of Georgia defended the "stepped-up basis" used to calculate an heir's tax liability. It is "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," Chuck Abbott explains for Successful Farming. "The White House has said it would include an exemption for heirs who keep the farm in operation." That's not enough, Scott told Biden.

"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 in farmland ownership," Scott wrote. "This would make it more difficult for young, beginning, and socially disadvantaged farmers to get into farming."

Abbott notes, "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." But Scott called it "a critical tool enabling family farming operations to continue from generation to generation."

No comments: