Cheney Criticizes Attempts to Repeal Certain Estate Tax Changes
Congresswoman Liz Cheney issued a statement after joining 79 other members of Congress, one of whom is a Democrat, in introducing a resolution on preserving the stepped-up basis in the tax code.
The stepped-up basis describes when the price of an inherited asset, like a farm, is above its original purchase price after the owner dies.
To compensate for the increase, there is a part of the tax code that lets the new owner, when they sell that property, not have to pay taxes on the increase in value.
President Joe Biden has made some indications in the past that he wants to get rid of that part of the tax code, and his most recent budget proposal may attempt to do that in a section that would "modify estate and gift taxation" which purports to decrease the deficit by about $14 billion over the next five years.
"The stepped-up basis is an important provision of our tax code that helps farmers, ranchers, and small businesses pass their assets on from generation to generation," Cheney said. "Our agriculture industry and small businesses have suffered during this pandemic, and should not be saddled with more government overreach and higher capital gains taxes. I am proud to join my colleagues in supporting this commonsense resolution to protect family-owned farms, ranches, and small businesses in Wyoming and across the country."
According to a press release by Cheney, the resolution is supported by the National Cattlemen’s Beef Association, American Farm Bureau Federation, National Corn Growers Association, American Soybean Association, USA Rice, National Grange, and National Council of Farmer Cooperatives.
Among those groups, the National Cattlemen's Beef Association funded a study they claimed showed why it would be bad to repeal the stepped-up basis, the American Farm Bureau Federation and the American Soybean Association both funded analysis on the stepped-up basis, and the National Corn Growers Association also funded a study on the impact of the stepped-up basis.
On the other side, USDA Secretary Tom Vilsack has said that because of the exemptions that Biden proposed, $1 million per person, $2 million for a couple, and $2.5 million for a homestead, "you get 98% of the farms, almost 99% of the farms, not covered by this."
According to the U.S. Department of Agriculture, 96% of farms are family-owned, with the majority of the over 2.2 million farms in the U.S., 87%, being classified as small, meaning they make under $250,000 in gross revenue every year, while the small farms only account for 15% of the value produced by all farms.