As Congress sets its sights on tax reform this month, farmers and ranchers are urging them to provide tax relief. Micheal Clements has more.
Clements: Congress is back in session with a promise to work on tax reform this month. American Farm Bureau Federation tax specialist Pat Wolff says farmers need overall tax relief from Congress in any tax reform package.
Wolff: Farmers and ranchers need lower taxes overall, and in order for them to pay less taxes they need special tools that help them deal with the ups and downs of the farm economy. There’s a lot of talk about lowering business tax rates, but if rates are lowered and farmers lose things like cash accounting, like-kind exchanges, it could end up being a tax increase.
Clements: Wolff says there is a lot of talk about lowering corporate tax rates, but says business structures vary for farms, most of which are not incorporated. Other possible changes include priority items for agriculture.
Wolff: On the table are income tax rates, lower capital gains tax rates and possible elimination of the estate tax. All of those things are goals of Farm Bureau and would help farmers and ranchers.
Clements: Yet to be decided is whether or not the tax reform bill will be revenue natural, meaning for every dollar cut, another tax will take its place. One consideration to raise money is to eliminate the deduction for business interest.
Wolff: That would be very harmful to farmers. Farmers everywhere need to call their members and tell them that they want lower tax rates, but not at the expense of losing the interest deduction, losing cash accounting or losing like-kind exchanges.
Clements: Micheal Clements, Washington.