Sen. John Boozman said this week that proposed tax increases would be "devastating" for family farmers in Arkansas and across the country, the Arkansas Democrat-Gazette reported.
What's happening: The Sensible Taxation and Equity Promotion (STEP) Act, proposed by Sen. Chris Van Hollen (D-Md.), would change tax rules that currently exempt inherited assets from a capital gains tax.
- Plus: The current top capital gains tax rate is 20%, but the White House has suggested raising it to 39.6%, the Arkansas Democrat-Gazette reports.
Boozman spoke out against the STEP Act from the Senate floor Wednesday. He also criticized Democratic proposals to increase estate taxes and lower exemptions.
- "[T]heir proposed changes put the future of nearly 2 million family-owned farm operations at risk," he said.
Boozman, who's from Rogers and is the Senate agriculture committee's ranking member, also noted a June study by the Agriculture and Food Policy Center of Texas A&M University.
Why it matters: The study claims that if both the STEP Act and another, known as the 99.5% Act, become law, farmers could have additional tax liabilities averaging $1.4 million per farm.
Context: 97% of the state's 49,000 farms are family-owned.
- The average annual revenue of a farm in Arkansas is about $160,000, compared to expenses of more than $124,000.
- Zoom in: USDA's agricultural census in 2017 says there are more than 1,900 farms in Benton County and more than 2,200 in Washington County.
Yes, but: Van Hollen claims the STEP Act will focus on wealthy families. He says it would protect small family farms and businesses since the bill would allow individuals to exclude up to $1 million in unrealized capital gains.
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