Sweeping tax changes for Ag are included in the Democrats’ massive social spending bill, which could soon be headed to the House floor. Supporters of farm country said this week the best news for agriculture is that House Democrats dropped the president’s plan to impose a capital gains tax on producers at death. The idea of ending the stepped-up basis was just too unpopular in farm country. However, Joint Committee on Taxation Chief of Staff Tom Barthold said capital gains and estate taxes would go up.
“Increase the rate of tax, maximum rate of tax on capital gains income to 25%, and aligns the threshold breakpoints with that of ordinary income. The estate and gift tax, it would accelerate that reduction in the exemption amount, effective next year, the exemption amount would be approximately $6 million. And the amendment also doubles tobacco excise taxes.”
Also of concern, a hike in the marginal tax rate from 37% to 39.6%, which could impact so-called pass-through farms and other businesses whose income is taxed at the owner’s individual rate. But on the flip side are tax credits.
“A new credit for government owned and operated, and maintained, broadband facilities…this is a 30-percent credit that would be paid to the local government.”
There’s $65 billion for broadband in the separate Senate-passed infrastructure bill, plus $960 million to upgrade biofuel pumps and storage tanks. But the bill’s fate and that of the massive social spending bill hinge on Democrats resolving their fight over the size and scope of the larger bill.
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