In this file:
· Ag industry skeptical of Biden's tax plan
· NCBA on Biden’s proposed American Families Plan: “The devil is in the details”
· USDA Media Release: The American Families Plan Honors America’s Family Farms
· NFU: Biden Outlines Priorities for Economic Recovery, Immigration Reform, and Climate Action During Congressional Address
Ag industry skeptical of Biden's tax plan
Proposal said to protect harm against family farms.
Jacqui Fatka, BEEF Magazine
Apr 29, 2021
In a joint session address to Congress, President Joe Biden focused on continued calls to “build back better” and to pay for many of his priorities with tax reform. The American Families Plan encourages family farms to stay in the family and does not tax farm and asset transfer to family members upon death, but there are still concerns from farm groups on the impact to those in rural America.
The American Families Plan would repeal the deferral of gain for real estate like-kind exchanges – also known as 1031 exchanges- for gains greater than $500,000 and eliminate stepped-up basis for gains in excess of $1 million ($2.5 million per couple “when combined with existing real estate exemptions”) and tax said gains on any property not donated to charity.
According to the plan, the reform will be designed “with protections so that family-owned businesses and farms will not have to pay taxes when given to heirs who continue to run the business.”
This plan excludes the first $2 million of gains per couple ($2.5 million if the farm also includes the family home) from capital gains tax and heirs continue to get step up in basis on those first $2 million in gains. If an heir decides to sell the family farm, the first $2 million...
NCBA on Biden’s proposed American Families Plan: “The devil is in the details”
By Meghan Grebner, Brownfield
April 28, 2021
The National Cattlemen’s Beef Association says the suggested changes to existing tax code to pay for President Biden’s proposed American Families Plan could be detrimental to agriculture. The American Families Plan would help families cover the basic expenses that many families struggle with today, from lowering health insurance premiums, and builds upon the American Rescue Plan’s reductions in child poverty.
Danielle Beck, senior director of government affairs for NCBA says there are proposed changes to two tax provisions that are critically important to America’s farmers and ranchers. “It would repeal the deferral of gains for real estate like-kind exchanges for any gains greater than $500,000 and eliminate stepped-up basis in gains excess of $1-million per person and $2.5 million per couple when combined with existing real estate exemptions,” she says.
But, she says the reform does include protections for family-owned businesses and farms, and they will not have to pay taxes when the business is given to heirs who continue to operate the business.
And while the President’s plan does not make any changes to the current estate tax exclusion limits, Beck says there are concerns with proposed changes, similar to the like-kind exchange...
The American Families Plan Honors America’s Family Farms
The American Families Plan encourages family farms to stay in the family and does not tax farm and asset transfer to family members upon death
Apr 28, 2021
WASHINGTON, April 28, 2021 — The American Families Plan includes critical tax reform to ensure that the wealthy pay their fair share of taxes in order to finance essential investments in workers and families, including childcare, nutrition, higher education and more. One of those reforms is a change in the way capital gains are treated in our tax system so that, for people making over $1 million, the tax system no longer favors income from wealth over income from work. The plan won’t raise taxes on anyone making less than $400,000 a year.
Part of this plan to make sure the wealthy pay their fair share is a proposal to close the “stepped-up basis” loophole for wealthy estates so that enormous fortunes do not completely escape taxation. Under the proposal, unrealized capital gains (those that have never been previously taxed) are taxed at death above $2 million in gains per couple. But this won’t affect family farms that stay in the family.
· Under this proposal, estimates indicate more than 98% of farm estates will not owe any tax at transfer, provided the farm stays in the family. The tax the remaining less than 2% would owe, would be on their non-farm assets.
The President recognizes the importance of agriculture and family farms to the American economy and way of life. He also recognizes the risks and economic challenges unique to agriculture, family farms and ranching operations across America. The Biden Administration is committed to American agriculture, family farms, ranches and the rural way of life. The American Families Plan protects family farms and ranches in two key ways:
· No capital gains taxes at death for family farms. This plan includes a special protection for family-owned farms and businesses. It defers any tax liability on family farms as long as the farm remains family-owned and operated. No tax is due if the farm stays in the family. No one should have to sell a family farm they inherit to pay taxes and the President’s tax reform guarantees that.
· $2 million exclusion from increased capital gains for all married couples. This plan also excludes the first $2 million of gains per couple ($2.5 million if the farm also includes the family home) from capital gains tax and heirs continue to get step up in basis on those first $2 million in gains. If an heir decides to sell the family farm, the first $2 million in gains is tax free.
How the President’s Capital Gains Reforms Affect Family Farms:
· A married couple with $900,000 of farm gains and $200,000 of non-farm gains passes the farm onto their children. No capital gains taxes are owed, even if they sell the farm because the $1.1 million in gains are below the $2 million per-couple exemption.
· A married couple with $3.0 million of farm gains and $250,000 of non-farm housing gains passes the farm onto their children. No taxes due as long as the children keep the family farm.
The President’s capital gains reforms are a key part of building a tax code that rewards work, and not wealth. The American Jobs Plan and the American Families Plan are once-in-a-generation investments in our nation’s future. The American Jobs Plan will create millions of good jobs, rebuild our country’s physical infrastructure and workforce, and spark innovation and manufacturing here at home. The American Families Plan invests $1.8 trillion in our children and our families—helping families cover the basic expenses that so many struggle with now, lowering health insurance premiums, cutting child poverty, and producing a larger, more productive, and healthier workforce in the years ahead. Together, these plans reinvest in the future of American families, American workers, and the American economy.
To learn more about the American Families Plan, visit the White House.
Biden Outlines Priorities for Economic Recovery, Immigration Reform, and Climate Action During Congressional Address
Oklahoma Farm Report
29 Apr 2021
During his first joint address to Congress, President Joe Biden tonight highlighted the progress the United States has made on pandemic recovery and laid out his strategy to create additional jobs and lift more families out of poverty. The linchpin of that strategy is the American Families Plan, a comprehensive package that would invest $1.8 trillion in education, childcare, nutrition assistance, and paid leave.
A longtime advocate of strengthening the nutrition safety net, National Farmers Union (NFU) was heartened by the president’s attention to food insecurity, especially in light of the added challenges caused by the pandemic. “Though the issue of hunger has received a lot of attention over the past year, it certainly isn’t a new problem, and it won’t just disappear when the pandemic ends,” said NFU President Rob Larew. “Fortunately, we already have a safety net to catch families when money is tight – but it isn’t strong or wide enough to support everyone who needs help. President Biden’s bid to expand free school meals and summer EBT is an important step towards reinforcing our existing system so that it can accommodate all Americans experiencing food insecurity.”
To offset the cost of the plan, President Biden is proposing an array of tax reforms, including the elimination of stepped-up basis. In an overview, the White House promised that such a change would “be designed with protections so that family-owned businesses and farms will not have to pay taxes when given to heirs who continue to run the business.”
Larew indicated that he had reservations about the pay-for provisions and sought more information. “While we support many of the recommendations in the American Families Plan, we have questions about how these tax proposals will impact our farms and ranches,” he said. “The devil is in the details.”
President Biden also emphasized the necessity for immigration reform, asking Congress to offer undocumented immigrants a path to citizenship by passing his U.S. Citizenship Act of 2021. Under the bill, farm workers would be fast-tracked for naturalization and would be granted greater protections.
NFU expressed its approval of the bill...