In yet another move that will devastate the farmers of America and allow the government to destroy the food production, it has been found that new taxation on farms will hurt farmers drastically. The Sensible Taxation and Equity Promotion (STEP) Act authored by Senator Chris Van Hollen (D-MD) and the For the 99.5 Percent Act by Senator Bernie Sanders (I-VT) want to make drastic changes to how farmland is passed to family members. They will lower the threshold of the values that will be taxed and massively increase the taxation on farms. These bills are only targeting family farms, which will help their corporate donors.
Here is what the Texas A&M Agricultural and Food Policy Center (AFPC) has to say about the STEP Act. “Under the STEP Act, $1 million in capital gains would be excluded from taxation. The STEP Act also anticipates situations where generational transfers do not occur—for example, imposing capital gains taxes on trusts every 21 years. With that said, it is not clear how similar situations would be treated. For example, assume an institutional investor (e.g. hedge fund) holds farmland in an LLC. It is not clear if those institutional landowners would be impacted.”
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Here is what the AFPC has to say about the 99.5% Act. “The For the 99.5 Percent Act (99.5% Act)—introduced by Sen. Bernie Sanders (I-VT)—includes modifications to estate, gift, and generation-skipping transfer taxes.2 The 99.5% Act would, among other things, decrease the estate tax exemption to $3.5 million per individual and $7 million per couple. If signed into law this year, the changes would be effective for decedents dying and gifts made during calendar year 2021.”
Here is what the report by the AFPC has to say will happen with both acts. “If the STEP Act and 99.5% Act were both implemented (Scenario 5), 92 of the 94 representative farms would be impacted. The additional tax liability incurred would average $1.43 million per farm across all 92 farms. While the average impact in Scenario 5 is lower than that in Scenario 4, that is entirely because Scenario 5 impacts 92 farms (whereas Scenario 4 impacted only 41 farms). Importantly, when looking at individual farm results (Table 6), in no case was the tax liability in Scenario 5 lower than that incurred in Scenarios 3 or 4; in other words, combining the two policies always resulted in an equal or higher tax liability.”
This is now twice in the year that the Democrats have found a way to harm food production in the United States. These tax plans will just take longer but will go a long way in making the US need corporate farms to keep producing the necessary food to not need to import. The AFPC monitors 94 farms to see how they will be impacted. Any person can figure out the impact on farmers by raising their tax bill this high when they do not make this type of money normally.
Representative Glen Thompson (PA-15) said it best. “The livelihoods of American farmers are on the chopping block with proposed changes to stepped-up basis and the estate tax. Many Democrats love to talk about taxing the richest of the rich, but in reality, their proposals would hurt Main Street far more than Wall Street. The economic harm that will inevitably fall onto on (sic) our farmers, ranchers, and producers is too great a burden to gamble with, even with proposed carve-outs and exemptions. The report released today from the Agricultural and Food Policy Center underscores what the industry has known for years—new taxes on farmers are more than just an annoyance, they’re a generational threat to farm families.”
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