Study Shows Harmful Impact of Eliminating Stepped-Up Basis
A new study conducted for the Family Business Estate Tax Coalition, which includes almost 60 organizations representing family-owned businesses, including Farm Bureau, showed that repealing the step-up in basis would damage the gross domestic product (GDP) and significantly decrease job creation. The study also found middle-class, family-owned businesses would be particularly hard hit by the repeal.
Stepping up basis when an individual who is a member of a family-owned business dies is critical to that business surviving the loss of a loved one and a business partner. Repealing stepped-up basis by imposing capital gains taxes when assets transfer ownership at death would force many family-owned businesses to liquidate assets or lay off employees to cover the tax burden. This new tax would be imposed on top of any existing estate tax liability, further compounding the negative impacts and creating a second tax at death.
By raising the tax burden on investment, the repeal of stepped-up basis via tax at death increases the cost of capital, which discourages investment and results in less capital formation. With less capital available per worker, labor productivity falls and with it the wages of workers and, ultimately, GDP and Americans’ standard of living. The report forecasts that 80,000 jobs would be lost in each of the first 10 years and GDP would decrease by $100 billion over 10 years if stepped-up basis were repealed. Additionally, for every $100 of revenue raised by repeal via taxing capital gains at death, $32 would come out of the paychecks of workers.
Act now to protect stepped-up basis for Nebraska’s family farms and ranchers!
Growing Climate Smart Solutions Act Reintroduced
Sen. Mike Braun (R-IN), Sen. Debbie Stabenow (D-MI), Sen. Lindsey Graham (R-SC), and Sen. Sheldon Whitehouse (D-RI) reintroduced the bipartisan Growing Climate Solutions Act this week. The bill seeks to break down barriers for farmers and foresters interested in participating in carbon markets so they can be rewarded for climate-smart practices. Sen. Deb Fischer (R-NE) joined a long list of over 30 other cosponsors. Farm Bureau worked with Senators Stabenow, Boozman, and Braun to develop this legislation and supports the bill.
The Growing Climate Solutions Act creates a certification program at USDA to help solve technical entry barriers to farmer and forest landowner participation in carbon credit markets. These issues – including access to reliable information about markets and access to qualified technical assistance providers and credit protocol verifiers – have limited both landowner participation and the adoption of practices to help reduce the costs of developing carbon credits.
The bill establishes a Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Certification Program through which USDA will be able to provide transparency, legitimacy, and informal endorsement of third-party verifiers and technical service providers that help private landowners generate carbon credits through a variety of agriculture and forestry related practices. The USDA certification program will ensure that these assistance providers have agriculture and forestry expertise. As part of the program, USDA will administer a new website, which will serve as a “one-stop shop” of information and resources for producers and foresters who are interested in participating in carbon markets.
Through the program, USDA will help connect landowners to private sector actors who can assist the landowners in implementing the protocols and monetizing the climate value of their sustainable practices. Third-party entities, certified under the program, will be able to claim the status of a “USDA Certified” technical assistance provider or verifier.
Growing Climate Solutions Act:
- Requires assessment of current agriculture carbon markets (240 days after enactment, and every 4 years thereafter).
- Requires findings by secretary that establishment of program will fulfill purposes of the act to benefit farmers, etc., before secretary establishes program (270 days after enactment).
- Requires secretary to hold notice and comment rulemaking on the publication of a list of protocols for voluntary environmental credit markets and qualifications for certified technical assistance and verification providers (90 days after establishment of program).
- Allows covered entities to self-certify on a website maintained by the secretary (180 days after establishment of the program).
- Secretary shall publish a list of the technical assistance and verification providers certified (within 1 year after establishment of the program and quarterly thereafter).
- Requires annual audits of a representative sample of certified entities.
- Authorizes the secretary to revoke the certifications of entities in noncompliance, to make public the names of any entity for which the certification is revoked, and to notify any farmers who used the services of those certified entities.
- Establish 32+ member advisory council, 51 percent of which must be farmers, ranchers, or private forest landowners (within 90 days after establishment of program).
- Requires a report on the outcomes of the program every 2 years.
- Confidentiality – prevents disclosure of farmer-specific or confidential business information by USDA.
- Rescinds $4.1 million from section 1003 of the American Rescue Plan Act (administrative funds) to fund initial implementation of the program.
- Authorizes appropriation of $1 million per year for each of fiscal years 2022 through 2026.
The Environmental Protection Agency recently released new annual data on greenhouse gas emissions. Michael Clements shares what the report shows for agriculture.
Earth Day Highlights Ag Success in GHG Emissions
The newest Annual Greenhouse Gas Inventory Report from the Environmental Protection Agency offers a sector by sector look at emissions. In celebrating Earth Day, Farm Bureau reminded Americans the report includes good news for agriculture as the sector stayed relatively neutral compared to last year. U.S. agriculture greenhouse gas emissions contribute just 10.2 percent overall compared to some of the other economic sectors, like transportation, electricity, industry, commercial and residential. Over the last 70 years, U.S. farms have nearly tripled in production, but the amount of resources put in, like land, energy, and fertilizer have remained nearly stable.