Sen. Marshall: Save Family Farmers from Higher Taxes

(Goodland, KS, July 8, 2021) – U.S. Senator Roger Marshall, M.D. penned an op-ed for the Goodland Star-News laying out the devastating consequences of the Administration’s plans to hit farmers with extreme tax increases. The Senator said in part,

 “…the current Administration and big-city Democrats want to task our hard-working agricultural producers with financing their $6 trillion American Families Plan. First, they proposed not only eliminating stepped-up basis on realized property, but also on unrealized assets at the time of the owner’s death. Their proposal would tax unrealized capital gains over $1 million at ordinary income tax rates, which would be levied at the top marginal rate of 39.6%. That means the next generation inheriting land and equipment would have to pay taxes on the increases in value, even if the property is never sold. Secondly, the Administration has proposed lowering the exemption to the estate tax – or death tax – from $11.7 million under TCJA to $3.5 million per person and increasing the top tax rate from 40 to 45%… We cannot allow this Administration to saddle our hard-working farming families with the responsibilities of funding their socialist agenda.  Agriculture is responsible for 40 percent of the Kansas economy. We must do all we can to ensure our farm families have every opportunity possible to continue their way of life, bring the next generation back to the farm and keep rural America alive and well…”

You may click HERE or scroll below to read Senator Marshall’s op-ed in its entirety.

Save Family Farmers from Higher Taxes

Goodland Star-News
By: U.S. Senator Roger Marshall, M.D.
July 6, 2021

Wheat harvest is underway in Kansas and wheat fields in every corner of the state are speckled with combines, grain carts and trucks, all doing their part in the harvest process. And inside those implements are fathers, sons, sisters, mothers and brothers, all working side-by-side to harvest the crop that will provide the financing for land payments, implement loans and next year’s seed.

Agriculture is a capital-intensive industry. Harvesting wheat requires at least four different pieces of machinery, each costing at least a quarter of a million dollars or more. It takes years for a farmer to build enough equity to purchase a new piece of equipment or land, and for many families it is only by passing down land and equipment that a family farm can remain viable.

Across this great nation, 98 percent of farms and ranches are family-owned. Those families produce more than 85percentof the food, fuel and fiber we consume here in the U.S. These family farms, many in their fourth, fifth, or sixth generation, endure turbulent weather, inconsistent market conditions and tight labor markets.

In 2017, Republicans passed the Tax Cuts and Jobs Act (TCJA), which provided sweeping tax changes to encourage private entrepreneurship and grow our economy. Under TCJA, the exemptions for the estate tax more than doubled, keeping most family farms safe from redundant government taxation. 

But now, the current Administration and big-city Democrats want to task our hard-working agricultural producers with financing their $6 trillion American Families Plan. First, they proposed not only eliminating stepped-up basis on realized property, but also on unrealized assets at the time of the owner’s death. Their proposal would tax unrealized capital gains over $1 million at ordinary income tax rates, which would be levied at the top marginal rate of 39.6%. That means the next generation inheriting land and equipment would have to pay taxes on the increases in value, even if the property is never sold. Secondly, the Administration has proposed lowering the exemption to the estate tax – or death tax – from $11.7 million under TCJA to $3.5 million per person and increasing the top tax rate from 40 to 45%.

According to a report published by Texas A&M’s Agriculture Food and Policy Center, if the current Administration’s plan was enacted, 98 percent of family farms would see new higher tax burdens. In Kansas, farmers and ranchers would face more than a half million dollars in new taxes upon the death of a loved one. That’s simply unbearable. We want to encourage the next generation to return home to the family farm, not tax them in to bankruptcy.

America will see millions of acres of land and billions of dollars of equipment change hands over the next decade. While the current Administration contests that only a small percentage of our farm families will be impacted by their proposed changes, all evidence indicates otherwise. Any changes to the estate tax and opportunities to pass assets from one generation to the next could lead to further consolidation in the agriculture industry, fewer young families returning home to their rural communities, and more rural Main Street businesses closing shop.

We cannot allow this Administration to saddle our hard-working farming families with the responsibilities of funding their socialist agenda.  Agriculture is responsible for 40 percent of the Kansas economy. We must do all we can to ensure our farm families have every opportunity possible to continue their way of life, bring the next generation back to the farm and keep rural America alive and well.

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