Payments aimed toward eliminating the federal property tax have been launched within the Senate and Home on Tuesday.
Generally known as the “loss of life tax,” it has been a thorn within the aspect of agriculture — threatening household farms that must liquidate belongings to pay the tax.
The Demise Tax Repeal Act of 2021 was launched by Sen. John Thune, R-S.D., with 25 co-sponsors and Reps. Jason Smith, R-Mo., and Sanford Bishop, D-Ga., with 121 co-sponsors.
The property tax threatens greater than 74,000 household farms throughout the nation and greater than half of all farmland, in line with evaluation by American Farm Bureau Federation.
“Farmers and ranchers already face unpredictable challenges past our management but persevere to guard our nation’s provide of meals, fiber and renewable gas. The tax code ought to encourage farm enterprise progress, not add to uncertainty,” Zippy Duvall, Farm Bureau president, mentioned in a press release.
“Eliminating the property tax removes one other barrier to entry for little kids or different starting farmers to carry-on our agricultural legacy and make farming extra accessible to all,” he mentioned.
Farms with belongings above the property tax exemption typically should liquidate a minimum of a few of these belongings to satisfy property tax obligations, which might attain as excessive as 40% of the taxable quantity.
“Property taxes are a selected concern for farmers and ranchers as a result of they’re primarily based available on the market worth of the land. Given the constant appreciation in agricultural land and belongings, this may be very excessive for farmers and ranchers,” Farm Bureau acknowledged in its evaluation.
The 2017 Tax Cuts and Jobs Act quickly doubled the property tax exemption to $10 million per particular person listed for inflation via 2025. With out congressional motion, that exemption will revert to $5 million per particular person in 2026.
The Nationwide Cattlemen’s Beef Affiliation can be backing the laws.
“The property tax disproportionately harms cattle producers as a result of with few choices to repay tax liabilities, many farm and ranch households are compelled to make powerful selections on the time of loss of life — and in worst case eventualities, should unload land to satisfy their federal tax burden,” Jerry Bohn, NCBA president, mentioned in a press release.
Every day, an estimated 2,000 acres of U.S. agricultural land is paved over, fragmented, or transformed to makes use of that compromise agriculture. With greater than 40% of farmland anticipated to transition within the subsequent twenty years, Congress should prioritize insurance policies that help land transfers to the following era of farmers and ranchers, NCBA acknowledged.
“As small enterprise house owners, environmental stewards and the financial spine of rural communities throughout the nation, U.S. cattle producers perceive and admire the position of taxes in sustaining and bettering our nation,” Bohn mentioned.
“Nonetheless, additionally they consider that the best tax code is an equitable one. For that reason, NCBA ardently helps the Demise Tax Repeal Act of 2021,” he mentioned.
Earlier this month, NCBA despatched a letter to Thune, Smith and Bishop in help of the bipartisan laws.
The laws can be supported by the Household Enterprise Coalition and the Nationwide Federation of Impartial Companies.