Democrats want to make death a taxable event once again by repealing the stepped-up basis and then doubling the pain by imposing a capital gains rate as high as 43.4 percent. This will cause family heirs to liquidate assets or the inherited property itself to pay these untenable tax rates.
Last week, Republicans on the Ways and Means Committee held a meeting to hear from family farm owners about the impact the Democrats' tax plan would have on them. The testimony was powerful, here's an excerpt:
Pat McDowell, owner of McDowell Ranch, warned that Democrats' repeal of stepped-up basis threatens his family's ability to pass their five-generation cattle operation on to their niece:
"This is our story. We are 59 to 65 years old. Our goal is to pass our family ranch and farm to my niece and her husband because they want to continue our family business. We've done considerable estate planning which has cost a lot of money, and time. Our estate plan has been centered on using stepped-up basis. The Biden administration proposal totally undermines our estate plan. This plan punishes our family, just because we want the next generation to be able to make a living in agriculture.
"Taxing farmers and ranchers out of business only demolishes our national food security. Our kids want to be able to continue to help feed our nation.
"The loss of stepped-up basis will kill our family farm."
President Biden says that family farms won't be hit by his massive tax hike but hasn't explained how that would work and as Ways and Means Ranking Member Kevin Brady said,
"Ag folks are smart. They remember when Congress tried to do the same thing related to the death tax with similar provisions and carve outs for family-owned farms and businesses. That effort failed miserably. They're not easily duped, and they understand where this is headed. And they're very fearful about this. In fact, they're considered to be wealthy and should be in some way punished. That's how they feel provisions like this treat them. And it alarms them."
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