The Race to Complete Infrastructure and Tax Update

Infrastructure packages have been under negotiation within the Senate with debate on the definition of infrastructure and how to pay for the legislation. Read the infrastructure and tax update for more information.

Article By Haleigh Erramouspe

Where there is infrastructure there will be taxes. For months large infrastructure packages have been under negotiation in the Senate with significant debate on the definition of infrastructure and how to pay for the legislation.


Republicans have leaned toward a more traditional or “hard” definition of infrastructure: roads, bridges, broadband and the like, while Democrats have proposed a more expansive version of what they define as “human” infrastructure, including child care, elderly programs and ambitious climate measures.

After months of negotiations, President Biden and a bipartisan group of Senators—five Democrats and five Republicans—struck a deal June 24 on an infrastructure package. The compromise was a $1.2 trillion framework to fund roads, electric-vehicle charging stations, broadband and other “hard” physical infrastructure components.

After the compromise had been reached, Congressional Members argued for and against linking the package to a much larger, controversial $6 trillion package, including tax increases and “human” infrastructure components to pass via a partisan reconciliation process. While President Biden initially stated he would not sign the bipartisan bill into law without the other, causing support from the right to begin to erode, he quickly walked back that statement. Early in discussions, House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) held the line that the two bills must be passed together.

On July 13, a group of Senate Democrats announced a $3.5 trillion infrastructure blueprint developed by Schumer and the 11 senators who caucus with the Democrats on the budget committee to take the place of the original $6 trillion package. While smaller than the original proposal, it still includes an expansion of Medicare, tax increases on large inheritances and climate-based proposals.

On July 21, Senate Republicans rejected an attempt 6 by Senator Schumer to invoke cloture and begin debate on the bipartisan infrastructure deal negotiated with President Biden. The Republicans mounted a filibuster, seeking a delay until July 26, in an effort to garner time to iron out unresolved issues and review the final details.

Nearly a month after negotiators reached a bipartisan compromise with the White House, 17 Senate Republicans joined all 50 Senate Democrats July 28 in a vote to begin consideration of a $550 billion bipartisan framework. Despite the language still being written, the promise of Republican amendment votes and input and the hurdle of once again gathering 60 votes to close debate, Schumer vowed the Senate would pass the measure before the August recess. Despite challenges this measure faced, Democrats, Republicans and the White House are celebrating this step as a bipartisan win. While the initial push to tie passage of the bipartisan framework to the much larger “human” infrastructure package is no longer on the table, it is expected those championing the more expansive legislation will continue to move it forward at a later date through the reconciliation process.


In order to pay for many of the provisions in the Democrat-led infrastructure package, Biden and Democratic Leadership have proposed tax increases. These proposed tax increases could have extremely negative impacts on agriculture and small businesses and the way individuals transfer inheritance assets.

In the American Families Plan unveiled April 28, the Biden Administration proposed higher capital gains taxes on inherited assets and the elimination of stepped-up basis for gains in excess of $1 million. Stepped-up basis currently allows inherited assets to be taxed at their value at the time of the decedent’s death rather than the value at which the decedent acquired the property, avoiding paying taxes on the full increase in value of the assets since purchased by the decedent.

In a press release sent shortly after the plan was announced, USDA stated no capital gains would be due at death for family farms as long as the farm remains family-owned and operated. Additionally, there is a $2 million exclusion from increased capital gains for all married couples. USDA claimed 98 percent of farm estates will not owe any tax at transfer, provided the farm stayed in the family. This claim was refuted by the American Farm Bureau Federation who claimed 32 percent of U.S. farms would be worth more than $1 million, and those farms accounted for more than 90 percent of farmland.

Additionally, two more bills—the Sensible Taxation and Equity Promotion Act (also called the STEP Act) and the For the 99.5 Percent Act—have been introduced that could destroy the transfer of assets to the next generation of farmers and ranchers.

The STEP Act, led by Senator Chris Van Hollen (D-MD), proposes to eliminate stepped-up basis tax after the first $1 million and will impose a “transfer tax” on any assets transferred to a trust or any individual other than a spouse after the first $100,000 of cumulative gain. The For the 99.5 Percent Act, led by Senator Bernie Sander (D-VT) in the Senate and Representatives Jimmy Gomez (D-CA) and Jan Schakowsky (D-IL) in the House, would increase estate tax rates and cut the exemption on most assets.

At the request of Senate Committee on Agriculture, Nutrition, and Forestry Ranking Member John Boozman (R-AR), and House Committee on Agriculture Ranking Member Glenn ‘GT’ Thompson (R-PA), the Agricultural and Food Policy Center (AFPC) at Texas A&M University analyzed the impact the two pieces of legislation would have on farm and ranch estates.

Under the STEP Act, 92 of AFPC’s 94 representative farms would be impacted with additional tax liabilities incurred, averaging $726,104 per farm. Under the 99.5 Percent Act, 41 of the 92 representative farms would be impacted with additional tax liabilities incurred, averaging $2.17 million per farm. If both the STEP Act and the For the 99.5 Percent Act were simultaneously implemented, 92 of the 94 representative farms would be impacted with additional tax liabilities incurred averaging $1.43 million per farm across the representative farms.

National Sorghum Producers continues to stay engaged in protecting family farms’ ability to efficiently pass down assets from one generation to the next, and NSP supports the longstanding tax code provisions that are fundamental to the financial health of production agriculture and the businesses that support the sorghum industry. For more information, visit SorghumGrowers. com/issues or


This story originally appeared in the Summer 2021 Issue of Sorghum Grower magazine.