A study done by the Agriculture and Food Policy Center at Texas A&M University showed how farmers would be impacted by changing inheritance tax. The study took a look at two acts, the Sensible Taxation and Equity Promotion (STEP Act), and the 99.5 Percent Act. “The STEP Act announced by Senator Van Hollen proposes to eliminate stepped-up basis upon the death of the owner, and the 99.5 Percent Act introduced by Senator Sanders decreases the estate tax exemption down significantly from where it is today. This study looks at if those laws were to go into effect, what the impact would be on farmers and ranchers, ” American Farm Bureau Economist Veronica Nigh said.
She explained that the study was done by request. “Certainly, the ag community has been very interested and involved in the discussions around potential changes to the tax code. So, really, it was a culmination of the ag community being interested, expressing that interest through their grassroots efforts with their elected officials, and then those elected officials asking Texas A&M to take a look.”
The study helps us understand that both bills would be devastating to farmers. “AFPC maintains a database of 94 representative farms in 30 states. And so, this took a look at what the impact would be. And it found that if both the STEP Act and the 99.5 Percent Act were simultaneously implemented, 92 of the 94 representative farms would be impacted, with additional tax liabilities incurred averaging $1.43 million per farm,” Nigh said. This would be costly to farmers, to say the least.
