How could a “wealth tax” impact American farmers. As the presidential race heats up, some Democratic candidates have proposed such as tax on the riches Americans to pay for a variety of programs, from healthcare and childcare to reduce income inequality. But according to the American Farm Bureau federation, raising estate, capital gains, and other taxes would hit agriculture hard.
Some financial planners urging wealthy clients to transfer millions of dollars off shore. And some are going as far as looking at renouncing their U.S. citizenship and moving, which really isn’t an option for farmers. AFBF tax adviser Pat Wolff says one of the early plans proposed in Congress would have slashed the current exemption for estate taxes.
“The $11 million estate tax exemption virtually removes estate taxes from most farms and ranches in this country. Any rollback of that $11 million will increase the number of farmers who are over the limit and therefore, will have to pay the tax.”
Also, in question is whether Democrats would try to undo several Republican cut in taxes on small business ‘pass-through’ income.
“Farmers pay more capital gains taxes than the actual taxpayer. That’s because they own so much land, and anytime a piece of land is sold, that’s subject to capital gains. In addition to that, the sale of breeding livestock and timber is capital gains income.”
In the meantime, Congressional Republicans and the White House are working on ‘messaging’ bills ahead of the 2020 election to make permanent Tax Cuts and Jobs Act measures, including a 20% deduction on ‘pass-through income” affecting most farms.
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