When he used the power of seniority to claim chairmanship of the Senate Finance Committee in the new session of Congress, Iowa’s Chuck Grassley said he wanted greater tax fairness for Americans. Many farm groups share his goal of additional tax relief.
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.”
The tax bill written by the Republican-controlled Congress would deliver “near-term benefits to many ag producers, but rate reductions and estate tax changes beneficial to ag are temporary” and bring the risk of higher taxes in the future, says the accounting firm K-Coe Isom.
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 Republican-controlled Senate Budget Committee plans to approve its fiscal 2018 budget resolution this week. It will open the gate to $1.5 trillion in tax cuts over 10 years. The resolution, a blueprint for federal spending, foregoes any cuts in farm-bill programs, unlike the House package, which seeks a $10-billion cut in food stamps over a decade.
The most hated tax in agriculture, the estate tax, would be repealed as part of the tax reform package unveiled by President Trump in Indianapolis on Wednesday. Mega-farmer Kip Tom, who operates more than 20,000 acres in Indiana and Brazil, was chosen by the White House to attend the speech and to serve as a living example of the peril of the “death tax.”
The first overhaul of the tax code in three decades should result in a one-page tax return for most Americans, President Trump said in Missouri, while declaring that tax reform is the foundation of job growth. Agriculture Secretary Sonny Perdue said separately that the estate tax, a bugaboo of the farm sector, should be part of the overhaul expected to be a Republican priority in Congress this fall.
President Trump won election partly on his promise of tax reform, boosting the prospects for the first comprehensive overhaul of the tax code in three decades. Witnesses at a House Agriculture Committee hearing said any reform package must retain benefits now available to farmers, such as deducting interest paid on loans and use of cash accounting to calculate income.
More than two dozen Republican senators, including Majority Leader Mitch McConnell, signed on as sponsors of a bill by South Dakota Sen. John Thune to repeal the estate tax. Farm groups are long-time opponents of the tax, saying it disrupts transfer of property from one generation to the next.
Republican presidential candidate Donald Trump told a recent rally in Des Moines that Democratic nominee Hillary Clinton wants to shut down family farms, impose radical regulations, push tax rates on farms and other businesses to 50 percent and impose an estate tax of up to 45 percent on farms. "We rate the combination of claims as False," concludes the independent fact-checking site Politifact.