By Trish Svoboda
Today, U.S. Congressman Tracey Mann from Kansas’s 1st congressional district expressed his concerns regarding President Biden’s budget proposal for Fiscal Year 2025. He highlighted the potential risks posed by the proposed revenue measures for the same fiscal year. According to him, these proposals could undermine the stepped-up basis and introduce ‘marked-to-market’ capital gains taxes. He emphasized that such measures could be detrimental to farms, particularly those that have been family-owned for over 90 years. He referred to these taxes as ‘farm-killing’.
“Farming is a multi-generational calling, with many producers operating on the same land that their parents and grandparents did decades before,” said Rep. Mann. “Since coming to office, President Biden has proposed budgets every year that threaten the stepped-up basis and impose the new Farm Killer Tax – which will destroy the livelihoods of producers in Kansas and across the country. Taxing the unrealized gains of generational farm assets threatens the livelihoods of the people who feed, fuel, and clothe us – and in turn the food security of our nation. As the Congressman for the First Congressional District of Kansas, home to 60,000 farms and the third-largest agricultural producing district in the country, I urge President Biden to reconsider these devastating tax proposals.”
According to the U.S. Department of Agriculture’s Economic Research Service, family-owned farms constitute 98% of all farming operations in America. If the stepped-up basis were to be removed, 66% of these family-owned farms would see a rise in their tax liability.
During the 117th and 118th Congresses, legislation was put forward by Representatives Tracey Mann and Adrian Smith from Nebraska’s 3rd congressional district. This legislation aimed to maintain the stepped-up basis for family-owned agricultural producers and small business owners. In 2022, they spearheaded a letter to President Biden, urging him to rethink aspects of his Fiscal Year 2023 budget. These aspects posed a threat to the stepped-up basis and proposed the implementation of ‘marked-to-market’ capital gains taxes on properties such as farmland, which have been in family ownership for over 90 years. This proposed tax has been referred to as the “Farm Killer Tax”.
