As Congress works on another multi-trillion dollar spending package, agriculture finds itself in an interesting position. Proponents of the bill keep dangling carrots in front of agriculture to get its support. Dollars for research, conservation, renewable energy and more are very tempting. These are areas of need that agriculture has sought for years. However there is a stick in the form of tax changes that goes with it. Inheritance tax and step up basis are at or near the top of many ag groups’ priority lists. Now many are saying they are drawing a line in the sand and won’t support the spending bills if they include harmful tax changes. Secretary of Agriculture Tom Vilsack recently shocked and disappointed many in the ag community with his statement on taxes. The Ag Secretary said that keeping step up basis doesn’t protect farmers, it protects investors. He went on to say that the people who are going to pay tax under the proposal have never plowed an acre. Many farmers and ranchers disagree…strongly! This seemed to come our of left field. When Joe Biden became President and starting putting together his administration, agriculture took some solace in having a familiar face back at USDA. In Vilsack they at least had someone they had worked with before and for the most part seemed to be a supporting presence on their behalf. In his many years of public service I don’t remember him supporting a tax change like this that is so opposite of the position of the majority of ag groups and even some political leaders in his own party. Either Secretary Vilsack got some new information and revelation on taxes or he decided to take one for the team…Team Biden that is. Part of being a member of an administration is supporting and promoting the positions of the Boss who in this case is the President of the United States. Vilsack is not the first nor will he be the last ag secretary to do so but rarely do they took a position that so deliberately flies in the face of the people he supposedly is looking out for. Most farmers and ranchers understand they won’t always agree with a President’s ag policies but they expect the ag secretary to go to bat for them within the organization. This feels like Secretary Vilsack has chosen Team Biden over Team Agriculture. This position will be hard to defend moving forward. This spending bill, with all its carrots, may carry a stick that is too big for agriculture to accept. If farmers are taxed out of business then they won’t be able to reap the benefits that may come from the boost in spending.
Carrots & Sticks