Republican Iowa Sen. Joni Ernst blamed the Senate Democrats’ $3.5 trillion spending package, calling it the “double death tax” for the alleged negative impact on Iowan farmers Wednesday.
Senate Majority Leader Chuck Schumer and Vermont Independent Sen. Bernie Sanders introduced a $3.5 trillion infrastructure reconciliation package in July aimed at child care, climate change and Medicare expansion. President Joe Biden has expressed his support for the bill.
“We’ve heard over and over again about Bernie [Sanders] and Biden’s reckless $3.5 trillion spending spree that will be happening very soon. And they really haven’t been eager to talk about how this is going to impact middle class Iowans and how they’ll be taxing them to pay for their scheme,” Ernst, a member of the Senate Committee on Agriculture, Nutrition and Forestry, said. “It’s time for Bernie and President Biden to level with the American people.”
The bill aims to raise taxes on corporations and individuals within the high-income bracket while barring tax hikes on citizens earning under $400,000, according to The Hill. However, the plan intends to increase a capital gains tax on family-owned businesses, farms and ranches in an effort to end inheritance tax benefits, according to Bloomberg.
“Agriculture is our number one industry in the state of Iowa and that example is the farm-to-table tax that the Democrats are proposing on our farmers and our small business owners. Bernie and Biden, what they’re going to do [is] hit Iowa’s family-owned businesses. Most of those farms out there, they are modest farms, they are family-owned,” the Iowa senator continued.
“It is a double death tax and that’s on top of rising prices, inflation, all of that which we all know is basically a tax in itself. So Bernie and Biden’s tax-and-spending spree is going to be paid for one way or another by our middle class Iowans, middle class Americans and our Senate Republicans, we’re going to stand up against it. We’re going to stand with our hard-working Americans,” Ernst concluded.
Inflation surged by 5% under the Biden administration, growing at the fastest pace since 2008. Consumer prices rose disproportionately higher than Americans’ wages as prices of several commodities such as lumber and gasoline simultaneously increased. (RELATED: Biden Eases Off Campaign Promise To Tax Corporations That Earn More Than $100 Million)
Ernst, along with dozens of Senate Republicans, urged Biden to reconsider the taxes he reportedly plans to impose on American farmers through his American Families Plan in a July 21 letter.
“Under current law, passing down a family business to the next generation does not impose a capital gains tax burden on the business or its new owners,” the letter said. “Rather, the decedent’s tax basis in the business is ‘stepped-up’ to fair market value, preventing a large capital gains tax bill on the growth in the business value.”
“If the functional benefit of the step-up in basis were eliminated and transfers subject to the estate tax also become subject to income tax, as you have proposed, many businesses would be forced to pay tax on appreciated gains, including simple inflation, from prior generations of family owners-despite not receiving a penny of actual gain,” the senators continued. “These taxes would be added to any existing tax liability, creating a new backdoor death tax on Americans.”
In Iowa, 90% of farms are family-owned, which is defined as “any farm organized as a sole proprietorship, partnership, or family corporation,” according to Modern Farmer.