July/August 2021 - 33

Keeping the tax man at bay
" A billion here,
a billion there, and
pretty soon you're
talking real money. "
That quote
NATIONAL
POTATO
COUNCIL
Kam Quarles
Chief Executive
Officer
popularly attributed
to former Senator
Everett Dirksen, who
served in Congress
from 1933 to 1969,
almost seems quaint
in this current age
where a single federal
program can now
easily surpass the trillion-dollar threshold.
As the country continues to recover from
the pandemic, Congress and the Biden
Administration are actively debating the
type and size of additional relief that the
United States requires. A key consideration
in determining the size of those packages is
how to pay for them, and tax increases have
been suggested for at least some of those
bills. Unfortunately, some decision makers
have put tax increases for family farms in
their crosshairs as they seek " reforms. "
To date, multiple proposals floated by
the Administration and members of
Congress would rely on tax increases
on family owned and operated farms or
changes in how inheritance is treated to
fund the increased spending.
For example, the Sensible Taxation
and Equity Promotion Act (STEP Act) -
introduced by Senator Chris Van Hollen
(D-Maryland) - proposes to eliminate
stepped-up basis upon death of the owner.
Another bill, the For the 99.5 Percent Act
(S.994) - introduced by Senator Bernie
Sanders (I-Vermont) - would decrease the
estate tax exemption to $3.5 million ($7
million per couple), among other things, with
the goal to " end our rigged tax code and
ensure the wealthiest people and largest
corporations pay their fair share. " While it
might be targeted toward the wealthiest
0.5%, farmers with even modest estates
would likely end up paying substantially more
if this act is passed.
A third proposal, this one by the Biden
Administration, would require farms and
ranches to shoulder the burden to pay for
their $1.8 trillion American Families Plan. The
proposal would mainly be paid for through
changes to the tax code. Those changes,
Spudman * July/August 2021
33
including increasing capital gains tax rates,
increasing taxes on appreciated assets, and
limiting the use of like-kind exchanges, would
significantly burden family farms.
NPC is pushing back on these proposals
along with other allied agricultural
organizations. We are backed in these efforts
by key Congressional leaders who sit on the
House and Senate Agriculture Committees.
In June, Texas A&M University released
a report authored at the request of
Representative G.T. Thompson, Ranking
Member of the House Committee on
Agriculture, and Senator John Boozman,
Ranking Member of the Senate Committee
on Agriculture, Nutrition, and Forestry. The
report titled, " Economic Impacts of the
Sensible Taxation and Equity Promotion
Act and the For the 99.5 Percent Act on
AFPC's Representative Farms and Ranches, "
showed clear and significant tax increases
for farmers of all sizes. The study concluded
that, together, the STEP Act and the For the
99.5% Act would raise taxes an average of
$1.4 million on 98% of the farms analyzed.
" The data speaks for itself and should give
pause to anyone considering this approach
as an option to pay for new additional federal
spending. If changes of these magnitude
are pursued, as some have discussed,
the economic harm it will cause will have
a lasting impact on rural America, " said
Senator Boozman.
The report validates the concerns the
National Potato Council (NPC) and other
agriculture organizations have raised with
House and Senate leadership. In letters and
conversations with members of Congress,
NPC has argued that farms, still reeling from
the pandemic's continued impact on their
businesses, should not be on the hook to
pay for additional federal spending.
NPC opposes any and all proposals that
would eliminate or undermine tax provisions
necessary to protect family farms from being
broken up or shut down. Repealing steppedup
basis and imposing a second death tax
would have far-reaching negative impacts on
family-owned businesses, their employees,
and all those depending on them to deliver
food to their dinner tables.
Now is not the time to impose additional
burdens on those working every day to keep
Americans fed, and the NPC will continue to
fight for family farms in order to keep the tax
man at bay.
July/August 2021

Table of Contents for the Digital Edition of July/August 2021
