Tuesday, September 14, 2021

House Democrats maintain tax break used to keep farms in families; some ag-panel Dems seek info on climate outlays

The House Agriculture Committee approved part of President Biden’s $3.5 trillion spending bill Monday, minus Biden's plan to change a tax law that helps farmers keep land in their families.

The price tag of the package is $66 billion. It was to be $94 billion, but some Democrats on the panel balked at approving $28 billion proposed for land conservation and climate mitigation by farmers, saying the package lacked details of just how the money would be spent. Committee Chair David Scott, D-Ga., said he was confident that the conservation-and-climate money would get in later.

The tax issue is “stepped-up basis,” which reduces the capital-gains tax on inherited property. In April, Biden said the proposal would not increase taxes on heirs who keep the family farm running, but farm groups stoutly opposed the idea, and it "became a political lightning rod, potentially endangering passage of the so-called reconciliation bill in the narrowly divided House, and was omitted from the package of tax increases proposed by the Ways and Means Committee to help pay for the bill," reports Chuck Abbott of Successful Farming

The $66 billion expansion of spending on forestry, rural economic development, and agricultural research cleared the committee on a 27-24 party-line vote. It includes $14 billion for treatment of hazardous fuels in national forests and adjoining land; $9 billion for forest restoration; $10 billion to help rural communities and rural electric cooperatives transition to renewable energy; $2.25 billion for the Civilian Climate Corps, similar to the Depression-era Civilian Conservation Corps.

"Along with finding revenue to offset the cost of the reconciliation bill, the Ways and Means Committee proposed extending the $1-a-gallon biodiesel tax credit and creating a $1.25-a-gallon tax credit for sustainable aviation fuel that reduces emissions by at least 50%," Abbott reports. "It also would provide tax breaks for the purchase of electric vehicles."

For details of the bill or to watch a video of its hearing, click here. A section-by-section analysis of the tax proposals by the Ways and Means Committee is available here.

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