Infrastructure v Taxes

June 24, 2021

June 24, 2021

Hello everybody out there in farm country. This radio commentary is brought to you by the National Corn Growers Association, CropLife America, and Renewable Fuels Association. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today’s commentary –

This is Randy Russell sitting in for my good friend Jack Block. And now today’s commentary.

Over the past several months, Washington has been consumed with negotiations over a new
infrastructure package. The White House proposed a $2.3 trillion package. Senate Republicans
countered with a package totaling about $1 trillion.

The difficulty of negotiating an infrastructure package reflects not just politics, but also major
policy differences. In a Congress which is the most evenly divided in our Nation’s history,
passing any legislation is a steep uphill climb. But more problematic are the deep policy
differences between how Democrats and Republicans define infrastructure and how they propose
to pay for it. Democrats are pushing for infrastructure to include not just roads, bridges, ports and
rural broadband—but also expansion of social programs under the guise of “human
infrastructure.” Republicans are focused on more traditional infrastructure.

But bigger differences exist when it comes to how you pay for infrastructure. The White House wants to raise corporate and capital gains taxes. Meanwhile, Republicans want to protect the Trump tax cuts of 2017 and are looking to use unspent COVID assistance funds as a principal pay for. There is also growing discussion of raising the federal gas tax by indexing it to inflation. The current 18.4 cent/gallon Federal excise tax hasn’t been raised since the fall of 1993. While raising the gas tax can be considered a user fee, it disproportionally impacts rural Americans who must travel greater distances for work, school and basic services.

However, of greater concern to agriculture and rural America is the proposal to tax the transfer
of farm assets to the next generation of family farmers. These proposals include eliminating the
stepped up basis, increasing capital gains taxes for family farms and eliminating 1031 land

Key Members of the House and Senate Agriculture Committee have led the charge against the proposals, including House Agriculture Committee Chairman David Scott and Representative Jim Costa, as well as House and Senate Agriculture Committee Lead Republicans GT Thompson and John Boozman. Texas A&M’s Agriculture and Food Policy Center recently completed an analysis of the estate tax proposals. The result: 92 of their 94 representative farms would be incurring an average increase in their tax liability of $1.43 million per farm.

Those of us in agriculture know the importance of re-investing in our basic
infrastructure—roads, bridges, ports and rural broadband. This is the backbone of our future
competitiveness. We also know Washington policy makers often talk about protecting family
farms and rural businesses. I can think of no greater assault on the preservation of family farms
and ranches than to significantly raise taxes on the transfer of farm assets to the next generation.
You can’t talk about protecting and promoting family farms and then support these ill-conceived
estate tax changes.

Again, this is Randy Russell sitting in for Jack Block in Washington.

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