Between the corndogs and the carnival, the Missouri State Fair is always a whirlwind of seeing old friends and new, watching 4-H and FFA members show their prized livestock and taking in all of the best of Missouri agriculture. While you enjoyed the coldest milk on the fairgrounds (chocolate, if you’re like me), I hope you had a chance to visit the various displays in the Farm Bureau building, including a showcase of over 200 years of Missouri’s number one industry.
But beneath the celebrations of our agricultural traditions and history, Missouri farmers and ranchers are increasingly worried about their ability to plan for the future and keep their farms in the family. President Biden and Vermont Senator Bernie Sanders have proposed trillions of dollars in new federal spending and are looking to pay for it in part by raising taxes on farm families at the death of a loved one.
Through the years, Farm Bureau has worked tirelessly to eliminate the ludicrous federal estate tax. Short of that, Congress raised the exemption for the estate tax, indexed it for inflation, and maintained stepped up basis. These efforts have led to fewer heirs owing estate taxes to the federal government when inheriting a farm after a loved one passes away, but this could soon change.
The Biden administration and Senator Sanders have proposed significant tax law changes that threaten the continued legacy of family farms and small businesses in Missouri. These proposals would impose capital gains taxes immediately upon the death of a loved one and eliminate stepped-up basis. Forcing grieving farm families to pay the IRS tens or even hundreds of thousands of dollars to keep a family farm intact is unconscionable.
According to a recent study by the Texas A&M Agriculture and Food Policy Center (AFPC), proposals to change the estate tax exemption and eliminate stepped-up basis would impact 97% of the farms surveyed, with tax liabilities averaging $726,104 per farm. AFPC used a database of 94 diverse, representative farms in 30 different states to analyze the proposals.
These results are alarming, and the potential real-world impacts are even scarier. That’s why many of our federal elected officials spoke out against these dangerous proposals at a Farm Bureau press conference on Legislative Day at the fair. Farm Bureau members believe death should not be a taxable event. We have worked hard to ensure families can pass their farm to the next generation through sound public policy while encouraging families to have conversations about farm succession.
The end of the Missouri State Fair is always bittersweet, but the fight for family farms continues as Congress considers these proposals. You can learn more about Missouri Farm Bureau’s work to combat them at donttaxdeath.com.