The $1.5 trillion tax-cut package unveiled by House Republicans would eliminate the estate tax – the most-hated tax in agriculture – in 2023, while allowing larger deductions for purchases of equipment, according to the Ways and Means Committee. Farm groups were muted in their comments as they assessed the 429-page bill.
The largest farm group, the American Farm Bureau Federation, said it was studying the package to see if the new tax brackets will reduce the tax burden on farmers and ranchers. The Farm Bureau applauded provisions on expensing, business interest deductions and the estate tax. The National Farmers Union said it preferred a progressive tax system, not the “significant tax cuts for corporations and the wealthy” proposed by the House GOP. A progressive tax code “includes maintaining the estate tax and provisions like cash accounting, stepped-up basis, (and) interest expensing,” it said.
Although few families pay it, the estate tax is a top target of farm groups. The House GOP plan would increase to $10 million the amount of an estate that is exempt from the tax, double the current deduction of nearly $5 million. The new deduction would be indexed for inflation and the tax would be repealed in 2023.
The GOP package also would more than double, to $5 million, the Section 179 deduction for property and equipment purchases, and it “protects the ability of small businesses to write off the interest on loans.”
The American Soybean Association said it wanted to preserve the biodiesel tax credit. “That issue will require a strong push from the senate to get into the discussion,” it said. The National Biodiesel Board said it would work with lawmakers “to craft a robust, biodiesel tax incentive” for inclusion in the tax legislation.
Besides biodiesel, the Soybean Growers said its priorities also were cash accounting, stepped-up basis and like-kind exchanges.
For a two-page “highlights” of the bill, click here.
For an 82-page section-by-section summary fo the bill, click here.
To read the House GOP bill, click here.