• The bills introduced in the Senate by Sen. Mike Crapo (R-Idaho) and in the House by Rep. Peter Roskam (R-Ill.) will provide greater tax certainty for America’s farmers and ranchers.
• Under current law, the top long-term capital gains tax rate will rise to 20 percent on Jan. 1, 2013.
• The Crapo and Roskam bills would kill that increase.
The American Farm Bureau Federation is urging Congress to maintain capital gains rates at the current 15 percent level and strongly backs legislation introduced Tuesday that would eliminate the sunset of the current tax rates for capital gains and dividends.
The bills introduced in the Senate by Sen. Mike Crapo (R-Idaho) and in the House by Rep. Peter Roskam (R-Ill.) will provide greater tax certainty for America’s farmers and ranchers, according to AFBF President Bob Stallman.
Under current law, the top long-term capital gains tax rate will rise to 20 percent on Jan. 1, 2013. The Crapo and Roskam bills would kill that increase.
“Farm Bureau calls on Congress to pass these important bills introduced by Sen. Crapo and Rep. Roskam,” Stallman said.
“The legislation will prevent tax rates on capital gains and dividends from increasing. Allowing these tax rates to increase would undermine economic recovery efforts. Keeping tax rates for capital gains at the current level is vital for the health of both the U.S. economy as a whole and for the farm and ranch economy.”
Stallman explained that low capital gains tax rates increase the incentive for U.S. farmers and ranchers to invest in assets to grow their businesses and help them remain productive and profitable. Higher capital gains taxes make it difficult for many family farms, which make up 98 percent of total farms across the United States, to obtain land, buildings and animals they need to stay efficient.
“Farm and ranch owners are disproportionally affected by capital gains tax increases. Nationwide, 40 percent of all agricultural producers report some capital gains, nearly double the share for all taxpayers,” Stallman said.
“The impact of capital gains taxes on farming and ranching is significant because production agriculture requires large investments in land and buildings that are held for long periods of time,” he explained.
“Because capital gains taxes are imposed when buildings and farmland are sold, it is more difficult for producers to shed unneeded assets to generate revenue to adapt and upgrade their operations. Capital gains taxes also threaten the transfer of land to the next generation of farmers and ranchers, putting the future of agriculture at risk.”