WASHINGTON, D.C. (WLNS) – The debate over big infrastructure proposals on Capitol Hill now includes discussion over the future of America’s family farms.
To fund those infrastructure projects, President Joe Biden wants to increase taxes on the wealthy, including capital gains and estate taxes.
However, according to a nonpartisan study by Texas A&M released last month, those proposals would hit inherited farms hard.
The average farmer or rancher would pay roughly $730,000 in taxes when they inherit their family’s estate. That’s because many farms are rich in assets, but lack cash on hand.
Prof. Joe Outlaw, the Co-Director of Texas A&M’s Agricultural and Food Policy Center, led the study. He says the inheritance tax would be a significant hurdle for many families as their farms change hands to the next generation.
Pro. Outlaw says this would not necessarily lead to widespread farm closures, but the loans to pay off the taxes would take years to repay.
In response, the White House has proposed tax carve-outs that would protect farms that stay in the family. However, the Biden Administration says it is also focused on closing loopholes that allow large fortunes to get passed along without taxation.