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Tax Proposals for Reconciliation Package are Taking Shape

The details of what House and Senate democrats intend to do in relation to tax policy for the $3.5 trillion budget reconciliation act are beginning to emerge in Washington. The House Ways and Means Committee was the first to reveal legislative language, and the committee advanced a tax bill on Wednesday, September 15th.

The House measure did preserve stepped-up basis and like-kind exchanges, but lowered estate tax exemptions. With regard to income taxes, the proposal increases the top marginal tax rate to 39.6% from the current 37%, effective in the 2022 tax year, and it increases the top capital gains rate to 25% from the current 20%, effective September 13, 2021. The House proposal also lowers the Section 199A maximum allowable deduction, effective in the 2022 tax year.

Agriculture industry organizations across the country, including the Ag Council of Arkansas, have been very vocal in opposing any tax proposals that could prove harmful to farmers and the industry as a whole. We will continue to express our views on tax proposals under consideration as this process continues.

There remains a long ways to go before a final product is considered as the Senate also must develop its own tax bill that will need to be reconciled with the House before reaching the president's desk. In addition, the future outcome of the overall reconciliation package is far from certain as divisions exist among democrats on the overall reconciliation package and specifics within.

More below:

https://waysandmeans.house.gov/media-center/press-releases/neal-applauds-committee-advancement-build-back-better-act

https://www.natlawreview.com/article/tax-and-employee-benefits-reform-house-committee-ways-and-means-submits-proposals

https://www.farmprogress.com/farm-policy/farmers-relieved-stepped-basis-preserved

https://www.agri-pulse.com/articles/16485-daybreak-sept-16-republicans-still-wary-on-stepped-up-basis

https://www.msn.com/en-us/news/politics/senate-democrats-prepare-to-tweak-house-reconciliation-package/ar-AAOrXpL

https://agnetwest.com/reconciliation-process-moving-forward-tax-policy-questions-remain/

https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2021/09/22/understanding-section-2032a-special

https://www.agri-pulse.com/articles/16509-farm-groups-win-for-now-expanded-protection-from-estate-tax

https://www.agriculture.senate.gov/newsroom/rep/press/release/boozman-usda-report-on-impact-of-proposed-changes-to-stepped-up-basis-disproves-administrations-claims

https://www.agriculture.senate.gov/newsroom/rep/press/release/ranking-member-boozman-urges-ag-community-to-keep-pushing-back-on-biden-administrations-tax-hikes