By Tammie Sloup
Following pushback by hundreds of agriculture groups, including Illinois Farm Bureau, it appears stepped-up basis will be protected in the $3.5 trillion federal spending package.
Initially, President Joe Biden proposed taxing capital gains at death, but ag groups said the tax would devastate family farms. According to legislation released Monday by the House Ways and Means Committee, that policy would not change under the Democratic tax package.
“So far, so good,” said Adam Nielsen, IFB director of national legislation. “I think we’re seeing that our timely action request and our continued vocal opposition to any changes in stepped-up basis have gotten through to Capitol Hill and the Biden administration.
“We’ll remain vigilant and continue to monitor for any changes as this spending and tax package moves through the House and Senate,” Nielsen said.
The tax provisions outlined in the tax package target corporations and high-income individuals. The corporate tax rate would rise from 21% to 26.5% for companies with income over $5 million, while the capital gains tax rate would increase to 25% for high-income individuals and there would be a 3% surcharge on incomes over $5 million a year.
To help pay for the spending, the legislation also includes a provision reducing the individual estate tax exemption from $5 million to $3.5 million, where it stood before the 2017 tax cuts. Today’s higher exemptions are scheduled to expire at the end of 2025.
The Ways and Means Committee will continue discussion this week on the expansive spending package, also known as the Build Back Better Act.
Also Monday, the House Agriculture Committee passed its spending portion of the bill by a 27-24 party-line vote, sending it to the full House.
The $66 billion proposal includes $960 million for biofuels, $7.75 billion for agricultural research to address climate change, $2.6 billion for USDA’s National Institute for Food and Agriculture, $18 billion for rural development programs and $2.6 billion for USDA’s Rural Energy for America Program.
A large chunk — $40 billion — is earmarked for forestry funding to help prevent wildfires, forestry conservation programs and vegetation management. The provisions will be added to the budget reconciliation measure along with $28 billion in conservation spending that's still being finalized.
“The Build Back Better Act puts rural America front and center. From rebuilding our communities to fighting climate change and keeping us competitive with China, this bill will bring rural America to the next level,” said U.S. Rep. Cheri Bustos, D-East Moline, who sits on the Ag Committee. “This is a once-in-a-lifetime opportunity to invest in the future of our nation and I’m proud to move this legislative package forward.”
The Agriculture Committee’s section will be added with sections approved by other committees to be compiled by the House Budget Committee later this month before advancing to the House floor for final approval.
This story was provided by FarmWeekNow.com.