Today, Rep. Randy Feenstra led 87 of his colleagues in sending a letter to President Biden, urging him to abandon his plan to cap like-kind exchanges. Limiting like-kind exchanges would result in a higher tax burden for landowners -- including farmers, small business owners, and small investors who rely on this policy to drive economic growth in rural communities. The proposal is included in the administration’s Fiscal Year 2022 budget as well as the American Families Plan.
“The Biden administration is pursuing a number of bad policies in their misguided effort to redistribute wealth. They are failing to recognize the detrimental impact their proposals will have on America’s heartland,” said Rep. Feenstra. “Like-kind exchanges are important for farmers looking to retire and pass their property on to the next generation, for rural communities that benefit from incentives for economic investment, and for small business owners who are looking to improve and expand their companies. I urge President Biden to abandon his plan to cap like-kind exchanges, which will place a harmful tax burden on farmers, hardworking families, and main street business owners.”
In their letter to President Biden, Feenstra and his colleagues argue President Biden’s proposal to cap like-kind exchanges would discourage investment at a critical moment for the economy. Additionally, they call attention to the devastating impact this move would have on family farmers and family-owned businesses.
“We urge you and your administration not to damage the livelihood of farmers everywhere by repealing or changing like-kind exchanges,” the members wrote. “For the agricultural community, a cap on like-kind exchanges would limit farmers’ ability to improve their operations through combining acreage, purchasing more productive land, and mitigating environmental impacts. Further, capping like-kind exchanges could make it more difficult to restructure businesses so that young or beginning farmers can join operations.”
The members also highlight that limiting like-kind exchanges would not only have a negative impact on individual farmers, but also on the ag industry and the national economy as a whole.
“It is critical that farmers and small businesses have the freedom to improve their operations in whatever way they see fit,” the members continued. “This proposed change to the tax code would limit the economic mobility and viability of businesses across the nation. Now is not the time to stunt growth, but to encourage it.”
The letter is supported by the American Farm Bureau Federation and the Real Estate Roundtable, which includes 19 national real estate associations.
Background
Feenstra has also been an outspoken critic of the Biden administration’s proposal to raise taxes on rural Americans -- including a proposal to alter stepped-up basis, which would result in higher taxes for farmers. In June, Feenstra challenged Office of Management and Budget (OMB) Acting Director Shalanda Young on this proposal; and in May, he joined his colleagues in writing a letter opposing proposed changes to stepped-up basis and calling for such changes to be excluded from any future legislation. A study published by Texas A&M’s Agriculture and Food Policy Center found that eliminating stepped-up basis could impact 98% of farm transitions.
Original source can be found here
