Congress Poised for Tax Code Overhaul

A joint statement on tax reform released recently by Republican congressional leaders and administration officials signals that lawmakers plan to make good on their promise to overhaul the tax code as soon as this fall.

“America’s farmers and ranchers are encouraged to see that key congressional leaders and the administration understand how important tax reform is to all Americans. Fixing our tax system now is crucial to creating economic opportunities for farmers, ranchers and other family-owned businesses. This is especially important as farmers continue to face down tough economic challenges,” American Farm Bureau Federation President Zippy Duvall said in response to the statement.

Among farmers’ and ranchers’ top priorities are comprehensive tax reform that helps all farm and ranch businesses; the reduction of combined income and self-employment tax rates to account for any deductions or credits lost; and cost-recovery tools like allowing businesses to deduct expenses when incurred; and a continuation of cash accounting, Section 1031 “like-kind exchanges,” and the deduction for state and local taxes.

The repeal of estate taxes and the continuation of stepped-up basis, along with reduced capital gains taxes, are important as well.

“Not only will reform strengthen our economy, but by addressing key issues like overall tax rates, capital gains taxes and enhanced expensing, it will be good for farms and other businesses,” Duvall said.

The group of congressional leaders and administration officials who released the joint statement on tax reform includes House Speaker Paul Ryan (R-Wis.), Senate Majority Leader Mitch McConnell (R-Ky.), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Kevin Brady (R-Texas).

In the statement, the group issued its support for lower taxes for individuals and businesses, with specific references to reduced business tax rates, expanded expensing and permanence. Noticeably absent is the border adjustment tax championed by House leadership.