WASHINGTON, D.C. – The Biden Administration’s proposal to create a second death tax—by repealing “stepped-up basis”—will harm America’s family farms, ranches, and Main Street businesses and will kill 1 million jobs, according to testimony during a Ways and Means Republican meeting on Tuesday.
Stepped-up basis is what makes it possible for a family business—like a farm—to pass from one generation to the next without being forced to sell off assets to pay an enormous tax bill to Washington.
But Democrats’ proposal to repeal stepped-up basis threatens the livelihoods of America’s farmers, ranchers, and small business owners.
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.”
CLICK HERE to watch Mr. McDowell’s full opening remarks.
Don Batie, President of Baite cattle company, a family-owned farming corporation, highlighted the vital role family-owned businesses play in local communities:
“Farms are just one example of family-owned businesses that are affected by these taxes. Small family-owned businesses are the bedrock of our communities. They support the youth teams, local fundraisers, local celebrations. Capital gains, estate taxes, and stepped-up basis are related. All deter family businesses from continuing for another generation.”
Michael Gilmartin, President of Commercial Creamery Co., added how this supercharged death tax could mean the end for many family businesses, including his:
“If there’s new legislation that eliminates the stepped-up basis, and makes my death a taxable event, there’s no way my kids can pay that tax. […]
“It’s already extremely difficult to carry a family business into the third and fourth generations. We’ve had fires, and we’ve had fights, and I think by going forward with this eliminating the stepped-up basis, we’re saying we don’t value the family businesses and we’re going to make them go away. I think it’s ironic that that’s a part of the American Families Plan.”