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February 27, 2014

Camp Tax Reform Proposal First Step Toward Tax Code Overhaul

For more information on Newsline, contact: Kari Barbic, Media Specialist, American Farm Bureau Federation, karib@fb.org.

 
House Ways and Means Committee Chairman Dave Camp released the Tax Reform Act of 2014, a complete rewrite of the tax code, on Wednesday. The proposed rewrite lowers rates and broadens the base, yet is revenue neutral and doesn’t create new tax revenue coming in to the government. Seanica Otterby has the story.
OtterbyAmerican Farm Bureau tax specialist Pat Wolff says one of the key provisions in the Camp proposal is that the rates will come down. The new top tax rates for individuals will be 25 percent, which is down from 39.6 percent.
WolffThere is a surtax on high income earners of 10 percent, but farm and ranch income won’t be subject to that extra 10 percent surtax.
OtterbyWolff says farmers and ranchers do lose some deductions under the proposal.
WolffIf you put them into a general category, they would deal with depreciation, and rather than a farmer or rancher being able to take a deduction immediately when they pay for something, they would have to spread that deduction out and take it over a number of years.
OtterbyFarm Bureau is happy the proposal doesn’t change cash accounting rules for farmers and ranchers, which Wolff says allows them to control their cash flow and reduce their income for tax purposes. At the end of the day, Wolff says the question is if farmers and ranchers will pay less taxes when the rates go down and they lose their deductions, including small business expensing.
WolffThe Camp proposal says 250,000 dollars of small business expenses are allowed. That’s good, but we’d rather see it back where it was a few years ago at the 500,000 dollar level.
OtterbyThere’s not enough time this year for tax reform to be passed into law, but Wolff says the proposal is the first step to moving forward. Seanica Otterby, Washington.

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