YOUR TEXAS AGRICULTURE MINUTE
Proposed estate tax law changes hit farms hard
By Gary Joiner
The Agricultural and Food Policy Center at Texas A&M ran the numbers. What it found was that two proposals in Congress to change current estate tax law would hit family farmers extremely hard.
The Sensible Taxation and Equity Promotion Act or STEP Act proposes to eliminate stepped-up basis upon death of the owner. The For the 99.5 Percent Act (99.5% Act) would decrease the estate tax exemption to $3.5 million ($7 million per couple), among other things.
The policy center maintains a database of 94 representative farms in 30 different states. Under current tax law, it says only two of the 94 representative farms would be impacted by an event triggering a generational transfer.
By contrast, under the STEP Act, 92 of the 94 representative farms would be impacted, with additional tax liabilities incurred averaging $726,104 per farm.
Under the 99.5% Act, 41 of the 92 representative farms would be impacted, with additional tax liabilities incurred averaging $2.17 million per farm.
If both the STEP Act and the 99.5% Act were simultaneously implemented, the policy center says 92 of the 94 representative farms would be impacted, with additional tax liabilities incurred averaging $1.43 million per farm across the 92 representative farms.
Members of Congress requested the study. The numbers don’t lie. America’s family farms and ranches can’t afford these two estate tax proposals to become law.
The preceding commentary is brought to you by Texas Farm Bureau, the “Voice of Texas Agriculture.” Called “Your Texas Agriculture Minute,” TFB will issue thought-provoking editorials each week—via print and audio—to spark understanding of agriculture in the Lone Star State and its impact on each and every Texan.
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