Clements: The Protecting Family and Small Business Tax Cuts Act of 2018 makes changes in the tax code passed by Congress last year permanent for farmers and ranchers. The House of Representatives voted in favor of the bill last week. Pat Wolff, American Farm Bureau Federation senior congressional relations director, says the bill includes provisions that affect the vast majority of farms and ranches.
Wolff: Important to farmers and ranchers are keeping the lower tax rates, keeping the increase in the estate tax exemption and making sure that the 20 percent business income deduction stays put.
Clements: The Tax Cuts and Jobs Act, passed in 2017, reduced taxes for all businesses, but only the tax cuts for incorporated businesses operated as C corporations are permanent. Most farmers and ranchers however, file their taxes as sole-proprietors, partnerships or S corporations.
Wolff: We knew when tax reform passed last year that a second installment was going to be needed to make the provisions permanent. That’s what the House did last week. Now the bill goes over to the Senate where hopefully they’ll take action after the election.
Clements: Wolff says agriculture needs the predictably in the tax code the bill provides.
Wolff: Farming and ranching is difficult enough. There are so many unpredictable things, weather and markets, and the last thing that farmers and ranchers need is an unpredictable tax code, a tax code that changes after 2025. So, it’s not only important, but it’s necessary to make the temporary provisions of tax reform permanent.
Clements: Micheal Clements, Washington.