U.S. Senator Steve Daines led all 50 Senate Republicans in urging President Biden to abandon his effort to impose a tax increase on Montana family-owned businesses, farms, and ranches.
“These changes are a significant tax increase that would hit family-owned businesses, farms, and ranches hard, particularly in rural communities,” the Senators wrote. “These businesses consist largely of illiquid assets that will in many cases need to be sold or leveraged in order to pay the new tax burden. Making these changes could force business operators to sell property, lay off employees, or close their doors just to cover these new tax obligations.”
Read the full text of the letter HERE.
Eliminating what’s called the step-up in basis would have a devastating effect on Montana’s multi-generation operations, which could lead to job losses, liquidation, or outright closure. Agriculture and financial groups from across the nation expressed their support for Senator Daines’ efforts in protecting Montana family-owned businesses.
Statements of Support:
“Passing on the family farm to the next generation is a top priority for many farmers and ranchers,” said Zippy Duvall, president of the American Farm Bureau Federation. “Eliminating stepped-up basis and increasing capital gains taxes will make it much more difficult, or even impossible, for parents to pass on their farm or ranch to their children. This is a critical tool for America’s farmers and ranchers, and we urge all members of Congress to oppose efforts to eliminate it.”
“At a time when small businesses are working to recover from the COVID-19 pandemic, repealing stepped-up basis would be a devastating setback for family-owned businesses,” said Courtney Titus Brooks, senior manager of federal government relations at National Federation of Independent Business (NFIB). “The current proposal to eliminate stepped-up basis would cause significant job losses and would leave heavy tax burdens on future generations. Small businesses thank Senators Thune, Daines, and Crapo for advocating on behalf of family-owned businesses and urge Congress to keep this important policy in place.”
“We appreciate the efforts of Senators Thune, Daines, and Crapo to inform President Biden on the catastrophic impacts that the repeal of stepped-up basis would have on all family-owned businesses and are grateful to see so many in Congress are fighting to preserve the common-sense tax provisions so critical for U.S. cattle producers,” said Danielle Beck, senior executive director of government affairs of the National Cattlemen’s Beef Association. “The Biden Administration has made clear that bolstering the American economy is a top priority and recognized agricultural supply chain resiliency as a core component of that effort. Family-owned agricultural operations are the economic drivers of rural communities across the United States; therefore, it is imperative that this Administration understand that resiliency can only be achieved and maintained when new generations – whether their family has had a long history in agriculture, or they are breaking into the industry – can build upon the contributions of today’s farmers and ranchers.”
“Stepped-up basis has helped family-owned businesses and farms stay in the family for generations,” said the Family Business Estate Tax Coalition (FBETC) Steering Committee. “President Biden’s proposal to repeal this longstanding tax provision would saddle future generations with unsustainable tax burdens and make it that much harder to continue operating family-owned businesses and farms across the country. In addition to subjecting family-owned businesses and farms to a significant tax increase, repealing stepped-up basis also would lead to an estimated 800,000 job losses over the next decade. The FBETC appreciates Senators Thune, Daines, and Crapo for standing up for family-owned businesses and farms and we are hopeful that Congress will protect U.S. workers by preserving stepped-up basis.”
“If step-up in basis is eliminated it will be an economic disaster for family businesses, their employees, the local communities, and the national economy,” said Pat Soldano, president and CEO of the Policy and Taxation Group. “Family businesses create 59% of the workforce, 83.3 million jobs, and 54% of the GDP, $7.7 trillion. Elimination of step up and an increase in capital gains could result in an 81% tax on the business owner when he dies.”
Additional groups that support the senators’ effort include the American Farm Bureau Federation, Associated General Contractors of America, National Association of Manufacturers, National Cattlemen’s Beef Association, National Federation of Independent Business, Policy and Taxation Group, and the U.S. Chamber of Commerce.