Texas A&M study finds tax proposal would raise taxes for 98% of farms
New research seems to confirm farmers’ concerns about the Biden administration’s tax proposals. Ranking members of the House and Senate Ag Committees requested the study from Texas A&M.
Researchers looked at nearly a hundred farms in thirty states to see how changes to stepped-up basis and a decrease in estate tax exemption would impact farmers. They found all but two would face an additional tax burden of $720,000 dollars per farm.
Researchers say that both proposals would raise taxes an average of $1.4 million dollars on 98 percent of the farms.
According to Dr. Joe Outlaw with Texas A&M, “This is one of the most serious policy analyses we’ve done, meaning that it impacted almost every farm we have-- significantly. That is not to say that’s going to put them out of business, but what I would say is there isn’t the cash on hand on these operations to pay these taxes. So, they’re going to have to set up a loan and pay them out over time.”
The research did not account for the promised exemption for farms that stay in the family.
USDA has said that only 2 percent of farms would be affected by the proposed tax increase. Republican Senator John Bozeman said that his staff has requested USDA’s research that backs up that claim.