Farm alarm sounded
Three Kansas senators and two congressmen spoke to more than 100 Kansas agricultural leaders from all corners of the state recently at the state fair in Hutchinson.
The message was the same from all of them - the ruling Democrat party and all of the radical environmentalists are coming after the family farm, so beware.
U.S. Senators Jerry Moran and Roger Marshall, along with former Sen. Pat Roberts and U.S. Representatives Ron Estes and Tracey Mann spoke to Kansas Farm Bureau members about what is happening in Washington, D.C., especially as it relates to agriculture, The Hutchinson News reported.
All the legislators spoke of their concerns with the current Biden administration and the future of farming.
Moran, Marshall and Mann spoke about proposed legislation that, they said, aims to eliminate the “stepped up basis’’ and essentially, making it difficult for farmers and manufacturers, many mom and pop businesses that are in the family for generations, to pass their businesses or farms on to the next generation without severe cash penalties.
The “step-up in basis provision’’ reportedly adjusts the value, or “cost basis,” of an inherited asset (stocks, bonds, real estate, etc.) when it is passed on, after death. This often reduces the capital gains tax owed by the recipient.
The cost basis receives a “step-up” to its fair market value, or the price at which the goods would be sold or purchased in a fair market. This eliminates the capital gains that occurred between the original purchase of the asset and the heir’s acquisition, reducing the heir’s tax liability.
So eliminating “stepped-up basis’’ would increase the expected capital gains tax owed by recipients, possibly making it financially difficult for some to accept such inheritance.
“Agriculture is the underpinning of our rural communities; it is vital,’’ Rep. Mann said. “(Eliminating) stepped-up basis ends the game for our family farmers.’’
Without stepped-up basis, the tax rates would become so high for inherited land or machinery, taking over the farm or small rural manufacturing company would be difficult. This would force the sale of many farms and rural industries, the Republican legislators said.
“It (eliminating stepped-up basis) will be one of the most damaging things that could happen,’’ Sen. Moran said. “The biggest asset of farming disappears.’’
He said local manufacturing would also not get passed on to other family members. It would get sold, often to outside entities, and people would move out of state.
All the legislators said farmers need to pay attention and speak up.
“It (eliminating stepped-up basis) would be the end of the family farm,’’ Sen. Marshall said.
Rep. Estes said all spending is not investment. He explained investment is something that builds for the long-term and does not spend “our children’s future.’’
Marshall told the crowd that they are the “biggest conservationists’’ but most Americans don’t even realize it. He urged all those in agriculture not to allow the federal government to “get control of conservation rules.’’
Marshall also said farmers in Kansas need to get more credit for what they are already doing to help the environment. He said the U.S. has cut carbons and implemented no-till, minimum-till and cover crops for decades.
These days, with the very wide political divide, it is always good to take everything that politicians say with a grain of salt. On the other hand, there’s no question that Kansas farmers must take this information seriously, pay attention and speak up.