A bipartisan group of lawmakers is trying to protect a tax provision that reduces the capital gains tax on inherited property, saying elimination would hurt farmers and businesses.
The Joint Committee on Taxation says the failure to collect these taxes costs $40 billion per year, and Democrats have proposed ways to eliminate the provision, while leaving an exemption for farmers.
The resolution, introduced Tuesday by Reps. Tracey Mann (R-Kan.), Adrian Smith (R-Neb.), Jim Costa (D-Calif.), Jimmy Panetta (D-Calif.), Angie Craig (D-Minn.), and Bob Latta (R-Ohio), would support the “preservation” of the rule and “oppose efforts to impose new taxes on family farms or small businesses.”
President Joe Biden’s budget request included changes that would tighten loopholes related to partnerships and the stepped-up basis rule and those who have over $100 million in wealth, according to the Treasury Department’s Greenbook. Democrats have said the provision allows the wealthy to avoid paying taxes.
Bottom line
The resolution cites a study from the USDA’s Economic Research Service that found 66% of midsize farms would see a tax liability increase if the stepped-up basis was cut.
