Congresswoman Cindy Axne, a Democrat from West Des Moines, says she’d like to see a proposed tax change get rolled back, so it only applies to the country’s richest families.
President Biden has proposed treating the transfer of inherited property as if it were a sale, so capital gains taxes would be collected. Individuals would be able to inherit $1 million worth of property and couples up to $2 million worth of land or buildings, but Axne says that’s not a big enough exemption for family farms.
“Let’s say the farm was, I don’t know, $1000 an acre when they first got it and now it’s $7000 — so it’s a $6000 increase per acre and they’ve got 500 acres. You’re talking a lot of money that you’e got to pay the taxes on. If you do that, you may end up having to sell some of the land to pay the taxes,” Axne says. “What we don’t want is to sell family farms.”
Axne says small business owners also could be prevented from passing their business onto the next generation.
“I look at this as a Main Street issue,” Axne says, “and we’ve got to get this fixed.”
Axne says it’s not just an issue in rural America. She cites as an example a couple who bought a property in the Bronx and have run a bodega for decades, as they would be unlikely to be able to pass the small convenience store onto their children or grandchildren.
“Let’s say they bought it back in the day for a couple of hundred thousand dollars 50 years ago and now with all the gentrification, everything in the Bronx, it could be worth $4 million,” Axne says. “They will not be able to pay the taxes on $3.8 million. Who’s going to come in there? 7-Eleven — it’s going to be a large company — so this is an issue across this country.”
Axne made her comments after a meeting in Adel with representatives of more than a dozen farm and ag-related organizations.