Cloture Motion

Floor Speech

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Mrs. HYDE-SMITH. Mr. President, I appreciate the opportunity to join a number of my colleagues representing farm States to sound the alarm to the millions of rural Americans who will be harmed by proposed tax changes outlined in the American Families Plan. Described as a plan to help American families, it would do the exact opposite for farm families across the United States.

The most concerning changes to the Tax Code include decreasing the estate tax exemption, increasing capital gains tax rates on transfers of property to heirs, and increasing taxes on appreciated assets, such as farmland, which has increased in value very significantly in recent years.

These misguided proposals fail to take into consideration the fact that farmers in general are highly vulnerable to these types of tax changes, as land and equipment comprise most of the farmer's net worth.

If enacted, these tax provisions would strongly discourage and make it more difficult for our next generation to get into farming. The provisions would create significant hurdles from a financial perspective, to say the least.

With the average age of U.S. farmers being nearly 60 years old, do we really want to force surviving spouses or heirs to sell half of the farm they inherited simply to continue farming the land that has been passed down for generations?

Family farms are the backbone of American agriculture. Roughly 98 percent of all U.S. farms are family owned and operated. Whether you like large family farming operations or not, they account for 44 percent of total U.S. farm production annually. That is a staggering figure, given that American farmers contributed $136 billion to the U.S. gross domestic product in 2019. These people who put food on our table and clothes on our back do not need to go out of business because they are being taxed at every turn, punished for their achievements and sacrifices.

Initial reports from the Biden administration suggested that the proposed tax changes I am discussing would have very little impact on America's farmers and ranchers. However, recent research and analysis conducted by Texas A&M University paints a very different picture.

For instance, should the proposed capital gains tax changes and generational transfers become enacted into law, nearly all U.S. family farms would face higher taxes. Nationwide, the average additional tax liability per farm under the capital gains tax change would be $726,104. Mississippi would be the State most heavily affected, with an average additional tax liability per farm of $2.1 million. It is totally unbelievable.

Should the estate tax changes become law, recent analysis also determined that nearly half of all U.S. family farms would face higher taxes. The average additional tax liability per farm nationwide would be $2.2 million, and the fifth most heavily impacted State would again be Mississippi, with an average additional tax liability per farm of $4.6 million. That is totally incredible. As a former ag commissioner of Mississippi, I personally know these farmers and their families. This is truly unbelievable.

More than 3 years of net cash farm income would be needed to meet these additional tax obligations alone. That is simply unmanageable. I am perplexed as to why Democrats want to place the highest tax burden on one of the most economically challenged and socially disadvantaged States in the Nation, my home State of Mississippi.

Let's not forget that in rural America, the primary source of jobs and income are often associated with agriculture. It is the No. 1 industry in Mississippi, employing more than 17 percent of the State's workforce either directly or indirectly.

If family farms are taxed out of business, far more than the farmers will suffer. Low-income and minority populations across rural America will lose jobs and be forced to rely on government support. I hope this is not the underlying plan of my Democratic colleagues.

Let me be clear. For those who are willing to pay for reckless spending by punishing America's farmers and ranchers and everyone who relies on them, you will be doing far more than just that. You will be running off our next generation of farmers. You will be making it easier for large corporations owned by foreign adversaries, such as China, to buy up available farmland, and you will be ensuring that every American pays more for the food they eat and the clothes they wear. The list goes on.

I know there is a deep desire on the other side of the aisle to enact a reckless tax-and-spending spree that makes Americans more dependent on the Federal Government, but family farms cannot be caught up in the administration's punitive dragnet to find ways to pay for it.

Any changes to the Federal Tax Code should be geared toward supporting economic growth and helping the next generation keep these family-owned operations alive. I hope that we can all come to our senses on this.

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