Congress and the Joe Biden administration need to focus on what they can do to help farmers and ranchers and not be over-the-top with tax policy or regulations that burden producers and rural communities.
That is the opinion of U.S. Rep. Tracey Mann, a Kansas Republican, who has been conducting town hall meetings while Congress was on its Easter break. One of the town hall meetings was April 12 at Casey’s Cowtown Club in Dodge City.
As an example, he continues to oppose any plan that eliminates the stepped-up basis provision that helps families pass down family farms and businesses.
The idea was touted in 2021 by the Biden administration as a way to help generate more tax revenues to finance its $1.8 trillion American Families Plan. Biden said eliminating the stepped-up basis provision and allowing capital gains to be taxed accordingly would help pay for federal spending and would not impact most farm families. However, the idea faced bipartisan opposition and ultimately it was left out of the budget discussions.
The step-up in basis provision adjusts the value, or “cost basis,” of an inherited asset (e.g., stocks, bonds, real estate) when it is passed on, after death, according to The Tax Foundation. This often reduces the capital gains tax owed by the recipient. The cost basis receives a “step-up” to its fair market value, or the price at which the good would be sold or purchased in a fair market. This eliminates the capital gain that occurred between the original purchase of the asset and the heir’s acquisition, reducing the heir’s tax liability, The Tax Foundation said.
Mann said the plan would be “very devastating” for farmers and ranchers and small businesses, which drive the Big First economy. The First District includes 63 counties and as a result is the 11th largest congressional district in the country. The district is the No. 3 agricultural producing district in the country and is No. 1 in beef, sorghum and wheat production, No. 7 in corn production and No. 11 in dairy production, he said.
Another concern is that the administration has over emphasized burdensome regulations from the top down including Waters of the United States Rule, Mann said. WOTUS causes great angst with farmers and ranchers who believe that clean water is important, but a federal government approach to managing it is wrong.
Mann touched on the 2023 farm bill that has been in front the House Agriculture Committee, but many more hearings are needed to help produce a good bill to help farmers and ranchers. The farm bill needs to retain crop insurance, which was one of the items he singled out that producers say is vital for their risk management.
“We have to make sure the farm bill works for our producers,” he said. “Crop insurance is my biggest priority.”
To help producers, businesses, and consumers he believes the Biden administration needs to increase domestic fossil fuel production, which includes reversing the stand on stopping the Keystone XL crude oil pipeline. More energy produced in America, he said, should lower fuel costs. On April 13, Mann noted the importance of increasing biofuel supplies and praised Biden for lifting the summer restrictions of E15 fuel. The use of fossil fuels is also needed to produce fertilizer that growers need. Right now the price of anhydrous ammonia is about $1,400 a ton, which is more than twice what it was a year ago, according to farm economists.
Mann also said Russia’s invasion of the Ukraine is putting 400 million people at food security risk. That region is the main supplier of food to countries like Jordan, Syria, Yemen and Egypt. One estimate is that the region may only produce half of what it normally produces because of the invasion.
The congressman believes the U.S. should help Ukraine with aid and weapons as the Ukrainians have shown remarkable resolve and can win the war, which would send the right message to Russian President Vladimir Putin. Mann believes that Putin’s end game is to continue expansion to put together a new Russia so it looked like the former Soviet Union.
Dave Bergmeier can be reached at 620-227-1822 or [email protected].
