Senators Worry About Tax Proposal's Impact on Agriculture
By Chris Clayton, DTN/Progressive Farmer
Following up on President Joe Biden's plan to increase capital gains, an analysis released on the plan highlights that it only generates higher revenue for the federal government if the plan also eliminates stepped-up basis as well.
The analysis by the Wharton School of Business at the University of Pennsylvania looks at the tax possibilities under Biden's plan. Raising the capital gains rate from 20% to 39.6% for people with more than $1 million in income would actually lower federal tax revenue by $33 billion over 10 years – effectively a decline of $3.3 billion a year. The higher tax rates, the analysis states, would cause more wealthier Americans to hold on to their stocks or other assets rather than sell them.
However, eliminating the stepped-up basis as part of the proposal would take away the advantage of holding on to those assets. The Warton analysis estimates that raising the capital gains and eliminating stepped-up basis would increase taxes $113 billion over ten years.
The stepped-up basis issue was raised by senators on Tuesday who spoke to members of the North American Agricultural Journalists (NAAJ)...