WASHINGTON— U.S. Senator John Boozman (R-AR), ranking member of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, led a group of his colleagues in a series of speeches on the Senate floor that highlighted the detrimental impact that the Democrats’ reckless tax and spend agenda will have on family farmers, ranchers and rural America.
Boozman spoke in opposition to the Democrats’ proposal to levy tax increases on family farmers and ranchers to pay for massive new federal spending.
“Now, a new threat to their future looms — the Democrats’ reckless tax and spend agenda – for which family farmers and ranchers are being told to foot the bill. The Democrats are proposing changes to capital gains tax rates, stepped-up basis and the use of like-kind exchanges that put the future of our family farms and ranches at risk,” Boozman said in his remarks. “The next generation of family farmers will face devastating consequences if the Democrats have their way, as their proposed changes put the future of nearly two million family-owned farm operations at risk.”
Boozman was joined on the floor by agriculture committee members Sens. Chuck Grassley (R-IA), John Hoeven (R-ND), Roger Marshall (R-KS) and Cindy Hyde-Smith (R-MS). Sens. Roy Blunt (R-MO) and Jerry Moran (R-KS) also spoke about the harm the Democrats’ proposals will have on their state’s rural communities.
Senate Republican Leader Mitch McConnell (R-KY), who also serves on the committee, amplified the message during his daily remarks.
The following are Boozman’s complete remarks as prepared:
America’s family farmers and ranchers have faced unprecedented challenges in recent years.
They have been caught in the middle of trade wars, repeatedly lost harvests and livestock to one catastrophic natural disaster after another, and faced a whole new set of unparalleled complications when COVID-19 took hold.
Now, a new threat to their future looms — the Democrats’ reckless tax and spend agenda – for which family farmers and ranchers are being told to foot the bill.
The Democrats are proposing changes to capital gains tax rates, stepped-up basis and the use of like-kind exchanges that put the future of our family farms and ranches at risk.
The next generation of family farmers will face devastating consequences if the Democrats have their way, as their proposed changes put the future of nearly two million family-owned farm operations at risk.
The president and his allies in Congress will tell you that family farms and ranches will not be impacted by their proposed changes.
In fact, they make a very specific claim that 98 percent of farms will not be impacted.
Yet, they have provided no evidence to support that claim.
And they have been asked to provide that, directly, by myself and a majority of the Republican side of the Ag Committee.
We essentially asked the U.S. Department of Agriculture (USDA) to show its math. That request has gone unanswered.
It seems unlikely that we will ever get a response, so we took it upon ourselves to find out if there was any legitimacy to the claim.
We asked the highly-respected team at the Agricultural and Food Policy Center (AFPC) at Texas A&M University to conduct a study on legislation that mirrors tax increases President Biden and Congressional Democrats have floated to pay for their massive “human infrastructure” plan.
The results confirm exactly what we suspected—these proposed changes are going to crush rural America.
Remember the administration’s claim that 98 percent of family farms and ranches will be protected.
Well, AFPC’s research shows just the opposite when it comes to changes to stepped-up basis—which allows the tax basis of an inherited asset to be stepped up at death, to the fair market value as of the date of death.
If these changes were to be implemented, 92 of AFPC’s 94 representative farms would be impacted with an average additional tax liability of more than $720,000 per farm.
That means 98 percent of family farms included in AFPC’s study are hurt by these tax increases, not protected from them.
And as you can see on this map, those changes hit rural America hard.
We’re looking over a half a million dollars in additional tax liabilities per farm in the southwest and southeast, which includes my home state of Arkansas.
In fact, the average tax liability for the five Arkansas farms represented in the study, is over $800,000.
In the northeast and out west, these changes would result in over $700,000 in additional tax liabilities per farm.
And look at the Midwest. That’s over one million in additional tax liabilities per farm.
These obligations will take years to pay off.
And again, that is just when you take into account changes to stepped-up basis.
Add in the higher capital gains tax rates Democrats have proposed and limitations to like-kind exchanges—which allow taxpayers, including family farmers, to exchange property and defer the capital gains tax—and you can see why so many fear for their livelihood.
Farmers are land rich and cash poor. Farmland is equivalent to a farmer’s 401K.
Instead of traditional retirement accounts, farmers and ranchers invest in cropland and pastureland, and tirelessly work that land in an effort to create a more prosperous future for their loved ones.
That lifetime of hard work, planning and sacrifice will all be for naught if these changes are allowed to be implemented.
On top of that, these tax code changes will dry up the farmland market, lead to further consolidation in the agriculture sector, create barriers to entry for new or beginning farmers and stunt reinvestment in rural communities.
Ultimately, agriculture as a whole and rural America will suffer.
That is why my colleagues and I are down here today.
If changes of these magnitude are implemented, the economic harm it will cause will have a lasting impact on rural America.
These tax increases, which again are only being proposed because the Democrats are determined to force their reckless spending agenda through Congress, need to be rejected.
Original article source: https://www.boozman.senate.gov/public/index.cfm/2021/7/boozman-ag-committee-republicans-sound-the-alarm-on-devastating-impact-democrats-reckless-tax-spend-agenda-will-have-on-rural-america | Article may or may not reflect the views of KLEK 102.5 FM or The Voice of Arkansas Minority Advocacy Council