Cloture Motion

Floor Speech

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Mr. BOOZMAN. Mr. President, America's family farmers and ranchers have faced unprecedented challenges in recent years. They have been caught in the middle of trade wars, repeatedly lost harvests and livestock to one catastrophic natural disaster after another, and faced a whole new set of unparalleled complications when COVID-19 took hold.

Now a new threat to their future looms, the Democrats' reckless tax- and-spend agenda for which family farmers and ranchers are being told to foot the bill.

The Democrats are proposing changes to capital gains tax rates, stepped-up basis, and the use of like-kind exchanges that put the future of our family farms and ranches at risk. The next generation of family farmers will face devastating consequences if the Democrats have their way, as their proposed changes put the future of nearly 2 million family-owned farm operations at risk.

The President and his allies in Congress will tell you that family farms and ranches will not be impacted by their proposed changes. In fact, they make a very specific claim that 98 percent of farms will not be impacted. Yet they have provided no evidence to support that claim, and they have been asked to provide that directly by myself and a majority of the Republican side of the Ag Committee.

We essentially asked USDA to show its math. That request has gone unanswered. It seems unlikely that we will ever get a response, so we took it upon ourselves to find out if there was any legitimacy to their claim.

We asked the highly respected team at the Agricultural and Food Policy Center at Texas A&M University to conduct a study on the legislation that mirrors tax increases President Biden and congressional Democrats have floated to pay for their massive human infrastructure plan.

The results confirm exactly what we expected. These proposed changes are going to crush rural America.

Remember the administration's claim that 98 percent of family farms and ranches will be protected? Well, AFPC's research showed just the opposite when it comes to changes to stepped-up basis, which allows the tax basis of an inherited asset to be stepped up at death to the fair market value as of the date of death.

If these changes were to be implemented, 92 of AFPC's 94 representative farms would be impacted with an average additional tax liability of more than $720,000 per farm. That means 98 percent of family farms included in AFPC's study are hurt by these tax increases, not protected by them.

And as you can see on this map, this chart, those changes hit rural America very, very hard. We are looking at over half a million dollars in additional tax liabilities per farm in the Southwest and in the Southeast, which includes my home State of Arkansas. In fact, the average tax liability for the five Arkansas farms represented in the study is over $800,000. In the Northeast and out West, these changes would result in over $700,000 in additional tax liabilities per farm. And look at the Midwest. It is over $1 million in additional tax liabilities per farm.

These obligations will take literally years to pay off. And, again, that is just when you take into account changes to stepped-up basis, just that one particular part.

Add in the higher capital gains tax rates Democrats have proposed and limitations to like-kind exchanges, which allow taxpayers, including family farmers, to exchange property and defer the capital gains tax, and you can see why so many literally fear for their livelihood.

Farmers are land rich and cash poor. Farmland is equivalent to a farmer's 401(k). Instead of traditional retirement accounts, farmers and ranchers invest in cropland and pastureland and tirelessly work that land in an effort to create a more prosperous future for their loved ones.

That lifetime of hard work, planning, and sacrifice will all be for naught if these changes are allowed to be implemented.

On top of that, these Tax Code changes will dry up the farmland market, lead to further consolidation in the agricultural sector, create barriers to entry for new or beginning farmers, and stunt reinvestment in rural communities.

Ultimately, agriculture as a whole and rural America will suffer. That is why my colleagues and I are down here today. If changes of these magnitude are implemented, the economic harm it will cause will have a lasting impact on rural America.

These tax increases, which again are only being proposed because the Democrats are determined to force their reckless spending agenda through Congress, certainly need to be rejected.

With that, I yield to Senator Grassley.

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