The Tax Aggie Coalition has voiced concerns about the proposed changes to federal tax policy. More than 40 national and regional agricultural organizations comprise the coalition. A letter was sent to House and Senate leadership outlining the need for appropriate tax policy to ensure the future of agricultural operations. Signatories include the American Farm Bureau Federation, National Cattlemen’s Beef Association, Western Growers, and the National Association of State Departments of Agriculture.
“We write to express our significant concerns about legislative proposals that would jeopardize the viability of the family-owned businesses that make up our respective industries,” the coalition writes. “As Congress turns its attention to making investments in our nation’s infrastructure and human resources, we urge you not to alter or eliminate long-standing tax code provisions that are fundamental to the financial health of production agriculture and the businesses that supply its inputs, transport its products, and market its commodities.”
Two main points are emphasized in the letter. The coalition encourages the preservation of tax provisions to support future new and multi-generational operations. Additionally, the group calls for safeguarding the viability of all family-owned agricultural business entities. The proposed changes to tax policy are aimed at helping implement President Joe Biden’s American Families Plan.
The Tax Ag Coalition highlights three tax provisions critical for the agricultural industry. The step-up in basis is essential for helping family farms remain in the family after an owner’s death. Like-kind exchanges also facilitate the buying and selling of assets to enable farms and ranches to maintain an adequate cash flow to reinvest in the operation. Finally, the group also asserts the Sec. 199A business income deduction is a crucial component for maintaining a reasonable tax level for farming businesses. More than 370 million acres of agricultural land are projected to change hand over the next 20 years, underscoring the need for appropriate tax policy.