House Agriculture chairman David Scott, D-Ga., is raising objections with the administration's proposal to eliminate stepped-up basis, saying it "cannot be borne by the next generation of farmers taking over the land."

Scott wrote in a letter to President Biden, "Any increase in inheritance tax for those taking over farm land is untenable and will further strain a farm economy that is just now beginning to recover from the strain of the pandemic.”

He continued: "In particular, 'step-up in basis' is a critical tool enabling family farming operations to continue from generation to generation. The potential for capital gains to be imposed on heirs at death of the landowner would impose a significant financial burden on these operations. Additionally, my understanding of the exemptions is that they would just delay the tax liability for those continuing the farming operation until time of sale, which could result in further consolidation in farmland ownership. This would make it more difficult for young, beginning, and socially disadvantaged farmers to get into farming."

Last month, a group of 13 House Democrats representing agricultural districts informed Speaker Nancy Pelosi, D-Calif., and House Democratic leadership that they opposed the stepped-up-basis for capital gains proposal and its potential impact on family farms. They asked that family-owned farms and small businesses be exempted.

Biden proposes $6 Trillion budget

Last Friday, the White House released details for the $6 trillion FY 2022 President's Budget Request (PBR) to Congress. The proposal includes $1.5 trillion in discretionary spending programs ($769 billion for nondefense, a 16% increase over FY '21; $753 billion for defense, a 1.7% increase) for federal agencies in FY '22.  Included in the PBR is $2.3 trillion for the proposed American Jobs Plan and $1.8 trillion for the American Families Plan. 

The budget indicates how the funding for the proposals will be paid for over 15 years, including:

The budget now moves to Congress for consideration. Republicans have already announced strong opposition to many of the tax proposals.

USDA budget would increase broadband, research and nutrition funding

President Biden's proposed FY '22 budget would increase USDA's discretionary funding to $29.9 billion for research, broadband access, nutrition programs, conservation, rural development, and food safety. This is a 9% increase over FY '21.

Programs highlighted by USDA for increased funding:

Mandatory programs (commodity programs, crop insurance, various conservation programs, and most nutrition assistance programs) funding is estimated at $168.1 billion. This is a decrease of $20 billion from last fiscal year. This is the result of reduced need for the coronavirus aid programs for producers.

The budget does not propose any cuts in farm programs or the crop insurance program.  

Source: P. Scott Shearer, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.