To achieve tax equality, lawmakers have proposed eliminating the step-up in basis for assets passing through an estate at death. Closing the loophole would indeed tax the rich, but it would also impact middle-class Americans, including full-time farmers. Farmers would incur large tax liability, inhibiting their ability to earn a living exclusively on the farm. Eliminating step-up in basis is a volatile issue that lawmakers have considered implementing to achieve tax equality. This article will present the history of the step-up in basis debate and analyze past efforts to close the step-up in basis loophole. That history informs recent tax amendment propositions and their problematic effect on full-time farmers. Finally, the article proposes alternatives and protections for full-time farmers so that the agricultural community will not be adversely affected by a measure intended to achieve tax equality.
Saving Family Farms from Eliminated Step-Up in Basis
To achieve tax equality, lawmakers have proposed eliminating the step-up in basis for assets passing through an estate at death.