WASHINGTON, D.C. – Ways and Means Republican Leader Rep. Kevin Brady (R-TX), and top Republican on the Ways and Means Select Revenue Measures Subcommittee Rep. Adrian Smith (R-NE), hosted a meeting on Tuesday examining the Biden Administration’s proposal to create a second death tax — by repealing so-called “stepped-up basis” — that will harm America’s family farms, ranches, and Main Street businesses.
Rep. Brady said:
“Democrats have pledged to repeal ‘stepped-up basis,’ which 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.
“According to new economic analysis, Democrats’ supercharged second death tax on local farms and businesses will cost one million jobs over the next 12 years.
“The study also found that the tax hike would slash paychecks for workers by $32 for every $100 in revenue raised, while shrinking our GDP by $100 billion over the next decade.”
Rep. Smith said:
“Democrats’ proposal to repeal stepped-up basis encapsulates everything wrong with their entire tax agenda:
“They have proposed doubling the capital gains rate to nearly 40% in the name of so-called ‘fairness,’ rather than prioritizing economic growth or even revenue.“
CLICK HERE to watch the full meeting.
Democrats’ supercharged second death tax on local farms and businesses will cost one million jobs over the next 12 years.
- According to an economic analysis by the Family Business Estate Tax Coalition, Democrats’ death tax will destroy over a million jobs, slash paychecks for workers by $32 for every $100 in revenue raised, and shrink our economy by $100 billion over the next decade.
Even liberals claim President Biden is violating his pledge by increasing taxes on the middle class.
- According to an analysis by the liberal Tax Policy Center, President Biden’s tax plan will raise taxes on 75 percent of middle-class families next year.
Biden’s economic policies are cooling off the U.S. jobs recovery.
- In the first five months of this presidency, the Biden Administration added 500,000 fewer jobs than President Trump’s last five months, despite the advantages of a reopening economy. And due to inflation, real wages have declined since President Biden took office.
CLICK HERE to watch Rep. Brady’s full remarks.
CLICK HERE to watch Rep. Smith’s full remarks.
Rep. Brady’s opening remarks as prepared appear below.
Thank you all for joining us and thank you to Congressman Smith for leading this roundtable discussion with me today.
We’re here to discuss President Biden’s plan to create a supercharged second death tax and how doing so will harm America’s family owned-farms, ranches, and small businesses.
Democrats have pledged to repeal “stepped-up basis,” which 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.
According to new economic analysis, Democrats’ supercharged second death tax on local farms and businesses will cost one million jobs over the next 12 years.
The study also found that the tax hike would slash paychecks for workers by $32 for every $100 in revenue raised, while shrinking our GDP by $100 billion over the next decade.
Today, we’ll hear from several witnesses, including one of my friends, Pat McDowell, from Shamrock, Texas.
For five generations, Pat and his family have worked in the agriculture industry, growing corn and wheat, and raising cattle.
He and his wife Liz – who also owns and runs a cattle operation on her side of the family – know firsthand what is at stake if the President’s supercharged, second death tax is signed into law.
Before the pandemic, under the Tax Cuts and Jobs Act we saw the lowest unemployment rate in 50 years.
Unemployment reached all-time lows for African American workers, Hispanic workers, and workers without a high school degree.
American workers also enjoyed the fastest wage growth in a decade.
President Biden and Speaker Pelosi’s tax and spend agenda will reverse these historic gains.
We’re already seeing how the prospect of higher taxes are sabotaging our economic recovery and undermining our investment infrastructure.
President Biden insists on repealing the Republican tax cuts and doubling the capital gains tax, which will cost 6 million U.S jobs over a decade.
There’s a reason top economists call the capital gains tax the dumbest tax increase: while American families watch their paychecks shrink, government revenue will also decrease.
Even liberals aren’t buying the President’s pledge not to raise taxes on those Americans making less than $400,000.
The liberal Tax Policy Center found that President Biden’s overall tax plan will raise taxes on three-fourths of middle-class families in 2022 – rising to 95 percent of middle-class families by 2031.
This comes as Democrats fight to restore the SALT carveout for the wealthy.
When it comes to this hike in particular – repealing the so-called “stepped up” in basis – the Biden Administration is out of step with some of my friends across the aisle.
Thirteen Democrats have publicly expressed their concerns with President Biden’s targeting of working families’ farms, ranches, and small businesses.
Meanwhile, the Biden Administration is cooling the jobs recovery here at home.
In the first five months of this presidency, the Biden Administration added 500,000 fewer jobs than the last five months of 2020 – some of which were during the height of Covid cases and deaths.
That’s a half-million jobs short. And due to inflation, real wages have actually declined since President Biden took office.
I’ll conclude with this: by tying needed investment in rebuilding our infrastructure to crippling tax hikes, Democrats have pulled a bait and switch on the American people.
This was never about rebuilding America’s roads and bridges. It was always about crippling taxes and more Biden bailouts.
These proposed tax increases will wipe out the economic benefits of infrastructure.
We have an opportunity to reach a bipartisan consensus on infrastructure.
Democrats’ supercharged second death tax puts America’s family-owned farms, ranches, and businesses at risk.
The last thing Americans need is job-killing tax hikes.
I want to thank the witnesses again for participating in today’s discussion. And with that, I’ll turn it over to Congressman Smith. Thank you.
Rep. Smith’s opening remarks as prepared appear below.
Thank you, Mr. Brady, for your leadership in bringing together this roundtable, and for all of your work to make clear how disastrous the President’s tax agenda would be for American families, farmers, ranchers, and businesses at the worst possible time.
Democrats’ proposal to repeal stepped-up basis encapsulates everything wrong with their entire tax agenda:
They have proposed doubling the capital gains rate to nearly 40% in the name of so-called “fairness,” rather than prioritizing economic growth or even revenue.
They included repealing stepped-up basis and taxing capital gains at death in their proposal to force people to pay capital gains taxes because they know their confiscatory capital gains rate will create lockout that stops economic activity, which would actually reduce revenue.
Economic studies have shown that even after proposed exemptions more than 95% of farms and ranches would be hit, with the average tax bill in excess of $1 million, and that we would see 800,000 job losses in the first decade because of this proposal alone.
The last three economic hearings held in the Ways and Means Committee – a Tax Subcommittee hearing on taxing the so-called rich, a joint Tax and Oversight hearing on IRS enforcement, and our annual budget hearing with Secretary Yellen – have all focused on Democrat efforts to tax and audit small businesses, farmers, and ranchers.
The primary takeaway from each of these hearings has been bipartisan concern about the effect of repealing stepped-up basis on family farms and businesses across the country.
If you have held a farm or ranch for just one generation, the appreciation in land value during that time will ensure your kids will pay this tax.
If you have a small business and own the building you work out of, there is a strong likelihood your children will pay this tax.
If you are a first-generation homeowner and have been saving for retirement in major suburbs like Long Island or Orange County, hoping to accrue a little wealth to pass on your kids, there is a decent chance they will wind up paying this backdoor death tax.
Today we will hear from a Nebraska farmer about the direct impact repealing stepped-up basis would have on his family’s farm.
Don Batie and his wife Barb live and work on a family farm northeast of Lexington, Nebraska, in the central part of our state.
His great-grandfather immigrated to Plum Creek, Nebraska, in 1873, settling land under the Homestead Act, and Don and Barb live on that tree claim, which was filed in 1879.
For generations their family has worked, first to settle the west, then to continue working the land to feed their neighbors, their fellow Americans, and the world.
Don is here today to tell us how repealing stepped-up basis would threaten that dream for future generations of his family.
Thank you to all of our panelists for joining us today.
I yield back.