WASHINGTON, D.C. (NAFB) – President Biden’s proposed tax hikes to pay for his massive infrastructure and social spending plans has unnerved many in farm country, just as Biden is winning buy-in for his climate change proposals.

Farm groups like Biden’s ideas on rewarding farmers for climate-smart conservation practice but proposed new capital gains taxes could undermine that support. American Farm Bureau President Zippy Duval says, “a bright caution light is flashing,” on ending stepped-up basis and increasing capital gains taxes that could “punish” hardworking farm families.

AFB tax adviser Pat Wolff…

Biden would instead impose a capital gains tax at death on gains of one million dollars, or two million per couple, essentially replacing the stepped-up basis, while the capital gains rate would nearly double for households with income over one million dollars. USDA says most farms will owe no tax if they stay in the family, but AFB isn’t sure.

But one thing is known: a tax hike would allow Senate Democrats to again use the streamlined legislative procedure called “reconciliation” to pass Biden’s infrastructure and social spending bills with no GOP votes, provided all Democrats agree, which is not the case just yet.