Family Farms for the Next Generation

As Nebraskans know, I serve on the Ways and Means Committee in the House of Representatives. The Third District is both an economic powerhouse and one of the most rural districts in our country. I initially sought to join the committee to provide a voice for Nebraska on tax and trade issues which are critical to our rural communities. These issues are still front and center now.

Earlier this year, I made clear how President Biden's tax proposals would devastate America's farmers, ranchers, and small businesses. I organized an effort to oppose his plan to repeal stepped-up basis and tax capital gains at death. In fact, economists have estimated forcing families to cash out and pay capital gains at the time of a loved one's death would crush small businesses and family farms, causing more than 100,000 job losses per year, largely in rural America.

Nearly half of the House of Representatives joined me in my efforts opposing such detrimental proposals from the Biden Administration. We sent letters to Speaker Nancy Pelosi and Republican Leader Kevin McCarthy combating the repeal of the stepped-up basis, held numerous hearings, and hosted a roundtable discussion with Ways and Means Committee members to draw attention to this issue.

We succeeded in stopping at least part of President Biden's plan by keeping the repeal of stepped-up basis out of the $3.5 trillion budget package. However, there is still work to be done on the disastrous policies that directly impact our rural communities. For instance, rather than leave our existing estate and death tax laws in place to provide certainty to producers and small businesses, Democrats sought new ways to tax more people at death. They are halving the death tax exemption and misusing a longstanding proposal to protect the agricultural use of land from rising taxes to attempt to create an agriculture-specific carveout.

The current death tax exemption was doubled in 2017 by the Tax Cuts and Jobs Act, and with adjustments for inflation, that is $11.7 million per spouse in 2021. The proposal Democrats moved through the Ways and Means Committee this week would cut this amount back to a base of $5 million. This change could remove protection from the death tax from thousands of farms in Nebraska alone given current land and equipment costs.

Democrats attempted to remedy this by increasing an existing exemption designed to address potential disparities between the fair market value of agriculture and business property on the open market compared to its valuation if locked into its current service. While I agree we should ensure land is not being driven out of production as a result of its valuation for non-agricultural purposes, this should be addressed on its own. Democrats cannot pick winners and losers within the broader tax code. I offered an amendment in the Ways and Means Committee to remove these two bad policy changes from the bill, but unsurprisingly, it was rejected by the Democrats.

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