Tax reform mixed bag for agTax reform mixed bag for ag
House plan on tax reform includes eliminating estate tax and allowing businesses to write off full cost of new equipment.
November 2, 2017
The newly announced tax plan rolled out Thursday by the House Ways & Means Committee was welcomed by some in the agriculture industry, while others had some concerns.
The bill is touted as a simplification of the tax code so an individual or family can file taxes on a farm as simple as a postcard. It also lowers individual tax rates for low- and middle-income Americans to 0%, 12%, 25% and 35%.
Zippy Duvall, president of the American Farm Bureau Federation, said the proposal moves the U.S. closer to a tax system that rewards the hard work and entrepreneurship of America’s farm and ranch families.
“Today’s proposal includes expanded, immediate expensing while continuing the business interest deduction important to so many farmers and ranchers. It also provides immediate relief from the estate tax, with a repeal to follow in subsequent years,” he said.
The bill does allow businesses to immediately write off the full cost of new equipment.
BUILD Coalition spokesman Mac O'Brien was concerned, however, that the proposal limits interest deductibility. "Placing a limitation on the deduction of interest expense — a normal cost of doing business — amounts to a new tax on American job creators who borrow to invest and grow. This policy change would harm the global competitiveness of businesses across all sectors of the U.S. economy, from manufacturing to agriculture to telecommunications and broadband,” he said.
O’Brien said he is optimistic that Congress and the Administration can still offer full interest deductibility for all businesses.
Duvall said the Farm Bureau will be studying the plan to ensure that the new rate structure reduces the tax burden of the nation’s farmers and ranchers and gives them the flexibility they need to reinvest in their businesses.
The National Farmers Union (NFU) expressed concerns about the plan; specifically, in allowing for a repeal of the estate tax, it does not offer a way to counter that revenue generator.
“It repeals the estate tax, a significant revenue generator that affects only the wealthiest in our nation, and it does not provide adequate offsets for these cuts, translating to a $1.51 trillion increase to our federal deficit,” NFU president Roger Johnson said.
The National Biodiesel Board also expressed disappointment that the first draft of the congressional tax reform legislation does not include an extension of the biodiesel tax incentive.
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