Editor’s note: The following guest column was submitted by Sen. Kevin Daley who represents Bay, Lapeer and Tuscola counties in the 31st state Senate District.
Farming, and the hard work that comes with it, is something American farmers take real pride in. But farming isn’t for the faint of heart. We get up early, work until our hands bleed, and pray every day that the rain comes down and the crops come up. It’s a simple life, not often filled with the glitz or glamour of other jobs. But farming is a vocation we can all be proud of, something we do out of respect for the land and respect for our forefathers who farmed before us.
The Biden administration and allies in the U.S. Senate are trying to push a new capital gains tax on our nation’s farmers. Farmers face unpredictable weather, attacks from foreign markets, radical activism, and global pandemics, but now our very own federal government is going after them.
Currently, farmland is taxed at its current value when it is inherited or passed on to the next generation, rather than taxed on the increase in value since it was acquired. This process is known as “stepped-up basis.” When a farm is sold, an heir will only pay a capital gains tax on the appreciation in value since they took ownership, rather than being taxed on the appreciation dating back to the farm’s founding date.
Eliminating the stepped-up basis isn’t just about requiring heirs to pay more in capital gains tax; the proposed elimination also seeks to make the tax bill due when the person receives the family farm, rather than when they sell it. These changes would target the transfer of family farms from generation to generation and would mean the end for many because of exorbitant new taxes.
Farmers have their assets tied up in machinery, buildings, and property, but often they have very little cash on hand. This proposal would force many to sell their farm to pay the ridiculous new taxes when the farm is passed to the next generation. Any family farms that survive the taxes would still be devastated, and rural communities like ours would face a major economic crisis.
Hardworking families who have put a lifetime of work into building a business should not be singled out by those in Washington looking to pay for new spending. It’s a shameful money grab that comes at the expense of the very people who make sure we have food on our plates and in our stores.
Passing the farm down to the next generation is a sacred tradition, the end goal of a life’s work. For generations, families like mine have worked through all the challenges that have been thrown our way. We show up every day regardless of whatever stands in our way. And it’s our honor to pass our farms, and our legacies, to family members.
Sadly, this proposal out of Washington would make passing the family farm onto the next generation nearly impossible.
I, for one, won’t stand for it.
I have written the state’s congressional delegation asking them to fight against the repeal of the stepped-up basis. I am asking our federal leaders to stand up for hardworking farmers and stand against these farm-killing taxes.
Contact Sen. Daley at at 517-373-1777 or SenKDaley@senate.michigan.gov.