During a half-hour “bill passage event” that resembled a pep rally for the Republican-written and -passed tax bill, President Trump said farmers and small-business owners will benefit because “for the most part, [the] estate tax is wiped out. So they can keep their farms in the family, and that to me is a very important factor — very big.”
The tax bill doubles the exemption from the estate tax to $11 million per person from the current $5.5 million. Only a small number of families pay the estate tax, because of the large exemption. Nonetheless, farm groups perennially target the “death tax” for elimination, and farmers spend time and legal fees structuring their operations to avoid it.
“Most of the provisions in this tax bill are temporary, lasting for only seven years, so Farm Bureau will now focus our work on making those important tax deductions, lower rates, and the estate tax exemption permanent,” said Zippy Duvall of the American Farm Bureau Federation. The largest U.S. farm group hailed the bill for its lower tax rates — 94 percent of farmers and ranchers pay taxes as individuals — and for maintaining “all the important credits and deductions that farmers rely on.”
The National Farmers Union said the $1.5 trillion increase in the federal debt, a consequence of the tax cuts in the bill, “places farm program and entitlement funding on the chopping block. … At a time when rural America is experiencing the most severe economic downturn in a couple of generations, we cannot afford to take away their safety net.”
“GOP leadership has made clear that it will target for deep cuts in SNAP, Medicaid, school meals, Supplemental Security Income, housing assistance, the Earned Income Tax Credit, and the Child Tax Credit for low-wage working families, and other safety net programs,” said Jim Weill of the anti-hunger Food Research & Action Center. The group, like the NFU, said the increase in the deficit will be used as justification for proposing large cuts in social programs in 2018.
Many of the favorable provisions for individuals, including the higher exemption for the estate tax, expire after 2025. The National Cattlemen’s Beef Association said the bill expands “key provisions” for agriculture, such as cash accounting, bonus depreciation, and Section 179 expensing of business equipment.
The National Cotton Council said that “many family farms are structured as pass-through entities” and would see lower tax rates under the tax bill. The legislation is a welcome step, said the group, which speaks for the cotton industry from field through textile mill, one that should be followed by “strengthening and improving the current farm bill.”
For a White House fact sheet on the tax bill, click here.
To read remarks by President Trump and Republican congressional leaders about the tax bill, click here.