Last week, President Biden failed to convince enough progressive members of his party to agree to his Build Back Better legislation, forcing House Speaker Pelosi to punt the effort last week, again leaving the farming community in limbo. Roughly $28 billion in conservation, rural development, and forestry aid, as well as $65 billion for rural broadband in a separate infrastructure bill, are once again caught up in D.C. politics. That lack of support is an effort by 30 House progressives to force two moderate Democratic Senators to say if they’ll support the Biden Build Back Better Act of social and climate spending.

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American Farm Bureau’s Dustin Sherer meantime, said repeal of the step-up-in-basis tax break and early phasing out of the estate tax exemption are not in the bill, but that could change, as it will with the state and local sales tax deduction.

“Before it gets to the floor, there’s going to have to be some type of manager’s amendment to the text that makes that change. And that would be the same manner in which, should something adverse to farmers and ranchers, like the change in step-up-in-basis, or a transfer tax at death, come back, that would be the manner in which it does.” 

Democrats, Sherer noted, may also need to find more revenue to make up for many of their social program proposals.

“So, they would be looking for ways to patch holes in their existing scorekeeping regime, I guess, and that would be the area they’d start to try to look to the House bill and some of the stuff that’s already been flushed out. So, maybe not necessarily step-up, but they could maybe look back at the changes to the estate tax or something like that. So, the bottom line is, there are still ways that agriculture could be adversely impacted.” 

And still in the bill is an expansion of the net investment income tax to incomes over $400,000s and to all ‘S’ corporation partnership profits, and new surtaxes on the wealthy that apply to trust income as low as $200,000, hitting many intergenerational farm trusts.

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