President Joe Biden is proposing to impose higher capital gains taxes on inherited assets, with promised protections for farms and other family-owned businesses that continue in operation.

The change is intended to help pay for a $1.8 trillion package of social benefits announced Wednesday. The proposal, called the American Families Plan, includes expanded child nutrition assistance, free community college, universal pre-K, paid family and medical leave and an extension of Affordable Care Act subsidies.

Under current law, capital gains taxes are only applied to inherited assets such as land, buildings and stocks when they are sold, and then they are taxed according to the “stepped-up basis” — the value at the time of the decedent’s death, not the value at which the decedent originally acquired the property.

A summary of the president’s plan says he wants to eliminate a “loophole that allows the wealthiest Americans to entirely escape tax on their wealth by passing it down to heirs,” exacerbating income inequality.

“The President’s plan will close this loophole, ending the practice of ‘stepping-up’ the basis for gains in excess of $1 million ($2.5 million per couple when combined with existing real estate exemptions) and making sure the gains are taxed if the property is not donated to charity,” the summary says.

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“The reform will be designed with protections so that family-owned businesses and farms will not have to pay taxes when given to heirs who continue to run the business. Without these changes, billions in capital income would continue to escape taxation entirely.”

The White House didn’t provide any more detail of their proposal, but the Agriculture Department released a further explanation Wednesday evening that said the proposal "defers any tax liability on family farms as long as the farm remains family-owned and operated." The USDA summary said that assets subject to the $1 million-per-person exemption would continue to receive the step-up in basis when sold.

Patricia Wolff, a senior director of congressional relations for the American Farm Bureau Federation, said the $1 million exemption was inadequate for agriculture and that the promised provisions protecting farms and ranches would likely be complicated and expensive for farmers to use.

“Just saying that you're going to have some special program for farms and other family-owned businesses doesn’t mean that it’s a panacea,” she said.

She said 32% of U.S. farms would worth more than $1 million, and those farms account for more than 90% of farmland.

Biden's plan is in line with a proposal announced by Sen. Chris Van Hollen, D-Md., in March that included a $1 million exemption.

The president is not proposing any changes to estate tax laws, but he is proposing to raise the top individual tax rate from 37% to 39.6% and require all households with incomes of more than $1 million to pay that rate on all their income, including capital gains. That higher rate would make any tax on inherited farmland "astronomical," Wolff said.

But Jason Furman, an economic adviser to former President Barack Obama, said the proposal didn't go quite far enough.

"Taxing capital gains at death is a really important proposal that would do a lot to make capital taxation more efficient and effective," he said in one of a series of tweets. "I understand the $1m exemption may be needed politically, but substantively I also want more--which in this case would mean a lower exemption."

AFBF and other farm groups have been lobbying lawmakers to resist any of Biden’s proposals that would increase taxation of inherited assets.

Sen. Tammy Baldwin, D-Wis., told the North American Agricultural Journalists that farm leaders in her state have been bringing up the issue with her.

“I don't sit on the Finance Committee (which has jurisdiction over tax policy), but I will be in conversation with my colleagues there to make sure that they're aware of the concerns raised among farmers about this issue,” she said.

Biden likely would to hold all 50 Senate Democrats in line in order to pass his latest plan, especially with the tax increases he is proposing. Sen. Joe Manchin, D-W.Va., told a CNN reporter on Wednesday that the level of spending Biden is proposing makes him "very uncomfortable."

Senate Democratic Whip Richard Durbin, D-Ill., said the White House is open to changes, noting that Vice President Kamala Harris is calling Democrats to solicit ideas. "It apparently is a bill in formation," he told reporters.

To address food insecurity, Biden’s plan would expand USDA’s Summer EBT program to all children nationwide who are eligible for free and reduced-price meals during the school year. The EBT program provides assistance to purchase food during the summer. The program’s expansion would cost $25 billion.

The plan also seeks to increase the number of high-poverty schools where all children are automatically eligible for free meals under a “community eligibility provision.” The proposal would provide free meals to an additional 9.3 million children, 70% of whom are in elementary schools, according to the summary.

That proposal was welcomed by the School Nutrition Association, which represents school nutrition directors. “For schools that are able to participate, the community eligibility provision has been a tremendous benefit to students, families and school nutrition professionals,” said SNA President Reggie Ross.