Would you like a simpler, fairer, less burdensome tax code?
It may be possible to achieve later this year if all forces come together.
If so, it would be the first major tax overhaul in 30 years.
American Farm Bureau Tax Adviser Pat Wolff, says producers facing tough conditions right now need tax management tools to weather the economic storm.
Wolff also tells House Ag lawmakers that Congressional tax writers, considering changes to cash accounting, interest deductions, and other tax breaks, need to be careful how they structure the first major tax overhaul since 1986.
“Unless farmers and ranchers continue to have access to a menu of tax provisions that help them deal with the unpredictable nature of their businesses. There is a potential that even with lower tax rates there could be an increase in taxes that farmers and ranchers pay, say Wolff.”
Among AFBF tax priorities: Same-year expensing of equipment costs, cash accounting, lower capital gains taxes, continued use of “like-kind-exchanges” to defer taxes on assets being replaced, and ending the estate tax that Wolff calls a “cloud” over farming.
Former Ag panel member Kristi Noem, now on tax writing, Ways and Means, says it took her ten years to pay off a loan for the estate tax on her family farm after her father died in a tragic farming accident.
AFB and ag tax experts are not taking a position yet on a 20 percent ‘border adjustment tax, that Wolff says has both pros and cons. “The provision is designed to make our products more competitive in foreign markets, that’s a huge positive for agriculture because we export so much. On the flip side, we also rely on imported supplies such as fertilizer and fuel, and those items would increase in price, at least initially.”
But Wolff and others testifying say they’d have to see how it’s structured before they can tell if a border tax would be a ‘net-plus’ for agriculture.