More family farms will be in jeopardy from a 40 percent Death Tax rate.
WASHINGTON, D.C. – Family-owned farms are a critical part of America’s food supply and form the fabric of rural communities. The 2017 Trump tax cuts gave family farms, ranches, and small business owners relief by doubling the Death Tax exemption and indexing it for inflation each year. If this provision is allowed to expire at the end of 2025, more grieving families will fall under its prey and be forced to sell a long-held family farm or business just to pay a 40 percent tax bill. In the United States, 96 percent of the nation’s 2 million farms are family-owned and 88 percent are small family farms.
Ways and Means Committee Chairman Jason Smith (MO-08) released the following statement:
“Ahead of Thanksgiving, every American can be grateful for the hard work done by farmers to put food on our tables everyday. As a fourth-generation family farm owner who grew up in a small town, and represents one of the most working-class, rural districts in America, I know family farming is a way of life. The Death Tax can be a death sentence for American families wanting to carry on the legacy of a family farm. The Trump tax cuts were a welcome relief for these families worried about passing down their farm or small business to the next generation. Across the country, farmers and rural communities are telling Ways and Means Tax Teams about the certainty that President Trump’s doubled Death Tax exemption offered to family-owned small businesses. In our listening sessions, families have made clear the loss of the doubled exemption would mean more families choosing between attending to their grief or the threat of losing their farm or business because of excessive costs imposed by Washington. The American people gave Congress a mandate to build on the success of the Trump tax cuts to provide relief from the Biden-Harris economy, including for farmers.”
FACTSHEETS: How Every State Will Be Impacted By A 40 Percent Death Tax
VIDEO: Stopping a Tax Hike on Every American
Led by Rep. Adrian Smith (NE-03), the Rural America Tax Team has been meeting with farmers and rural communities about the positive impact of the Trump tax cuts. Consistently, they are sharing that the doubling of section 179 immediate expensing for small businesses and farmers in the Trump tax cuts as well as immediate 100 percent expensing lowered the cost of investing in new, more productive farming equipment while allowing the next generation to continue the family business.
Listening to Americans
Under the House Republican majority, the Ways and Means Committee has gone out into communities across the country and listened directly to the American people about how Washington policies are affecting their everyday lives. In hearings in and outside Washington, family-owned businesses have shared that the Death Tax crushes the ability of many families to pass a farm or business to the next generation. Hearing on Pro-Growth, Pro-Worker Tax Policy | Iowa State Fair
Steve Sukup, Iowa manufacturer: “Our third generation is in the office every day. We have six members of our third generation. They enjoy coming to Sheffield, [Iowa] every day and working throughout the different jobs of our manufacturing. To be able to pass it on, that would just be overwhelming and not possible.”
Hearing on Building On the Success of the Trump Tax Cuts | Washington, D.C.
Austin Ramirez, Wisconsin small business owner: “I think family businesses are an indispensable part of the U.S. economic system. We take long investment horizons; we invest in our communities; we have consistency of leadership. You want policy that encourages multi-generational family businesses, and both stepped-up basis and the Death Tax do the opposite, and make it more difficult for families to maintain businesses and have these entities passed from one generation to the next.”
Trump Tax Cuts Helped Family-Owned Small Businesses and Farms
- Doubled Section 179 immediate expensing from $500,000 to $1 million and indexed the maximum to inflation.
- Offered 100 percent full expensing for small businesses, making it easier for cash-strapped small businesses to purchase new equipment.
- Provided closely-held small businesses a 20 percent deduction, allowing more small businesses to hire new workers and build new facilities.
- Doubled the Death Tax exemption and indexed it for inflation each year, allowing more families to pass on family farms or small businesses to the next generation. If this provision expires, more family businesses will fall victim to the Death Tax’s 40 percent rate.
- In the United States, 96 percent of the 2 million farms are family-owned and 88 percent of the total number of farms are small family farms.
- 99.9 percent of businesses in our country are small businesses, employing 61.7 million Americans in every state and every congressional district.
FACTSHEET: Key Individual Tax Policies from the Trump Tax Cuts Set to Expire Across America
READ: Ways and Means Tax Teams
