Capital Gains Tax Precludes Farmers from Passing Torch
Washington--The American Farm Bureau Federation today urged Congress to reform the capital gains tax because of its detriment to young and beginning farmers. In a statement submitted to the House Ways and Means and Senate Finance committees’ joint hearing on tax reform, AFBF said the cumbersome tax makes it difficult for current farmers to pass the torch to a new generation of agriculturalists.
“Since approximately 40 percent of farmland is owned by individuals age 65 or older, capital gains taxes provide an additional barrier to entry for young farmers and ranchers at a time when it is already difficult for them to get into the industry,” said the AFBF statement. “Capital gains tax liabilities encourage farmers to hold onto their land rather than sell it, creating a barrier for new and expanding farms and ranches to use that land for agricultural purposes.”
The top capital gains tax rate will increase by a third on the first of the year, from 15 percent to 20 percent. Farm Bureau supports a permanent extension of the 15 percent rate.