America’s farmers are looking for tax relief, and early signals from plans recently passed by the House and Senate are promising.
The House version eliminates the estate tax. The Senate version doubles the threshold, making the first $11 million of inheritance free of estate taxes.
“I personally favor that one,” says Iowa Senator Charles Grassley. “Doubling the amount will help most family farmers.” Grassley sits on the Senate Ag Committee and is a senior member of both the Budget and Finance committees. He made his remarks in his weekly Capitol Hill Report.
Grassley says he sees even greater benefit in the tax reform plan for farmers than estate tax relief. “This is primarily a middle income tax cut,” says Grassley, “and most family farmers are middle income.”
Furthermore, the plan offers a special credit to farms and small businesses. A portion of business income, 17.4%, would be taxed at a rate lower than the individual income tax rate. “This is essentially a tax credit for taking the capital risk,” Grassley explains.
The Senate hopes to move the bill this week. The Senate and House will then attempt to find common ground between the two versions of massive tax code overhaul.
Grassley is also looking to help farmers by continuing the trend of strong ag exports. As reported by Successful Farming, the U.S. hit the benchmark of the third highest level of exports in a fiscal year in 2017, led by soybean shipments at a record 60 million metric tons. According to a USDA report, ag exports for Fiscal Year 2017 totaled $140.5 billion, up $10.9 billion from 2016.
“The main thing we need to do is not screw up NAFTA,” says Grassley. “That is the biggest source of ag exports, especially Midwest grain.” Exports account for 20% of U.S. farm income, according to the USDA.
Grassley says he has emphatically made the case to U.S. Trade Representative Robert Lighthizer that losing NAFTA would be a disaster for ag. “Maintaining our current relationships is our best fight in growing export markets,” he adds. The U.S. ag sector has posted an annual trade surplus for more than 50 consecutive years.
To get those ag products to market requires transportation infrastructure.
Infrastructure improvements made the campaign promise list, but little has been said since. Grassley says for insight on that, it helps to look at “Where we are supposed to be and aren’t. On January 20 we said we would repeal the Affordable Care Act by Easter. Then we said we’d have tax reform by August 1, and here it is four months later. Infrastructure has been pushed into next year.”
President Trump’s proposed FY 2018 budget includes an additional $200 billion over nine years for infrastructure, but offers little details as to implementation, funding sources, or a clear definition of “infrastructure.”
A February 2017 USDA report identified an $836 billion backlog of unmet capital investment needs for the country’s highways and bridges, and projected a 40% increase in freight volume by 2045.
Grassley does expect timely action on Iowa Secretary of Agriculture and Natural Resources Bill Northey’s confirmation to a USDA position. Northey has been nominated as the Ag Department’s undersecretary for farm production and conservation.
Senator Ted Cruz has held up the nomination over biofuels policy issues, but Senate Majority Leader Mitch McConnell has indicated his intent to override Cruz and bring a list of judges and undersecretaries – including Northey – before the Senate for confirmation the first or second week of December.
“He’s an authentic farmer himself. He’s trusted in Iowa,” U.S. Secretary of Agriculture Sonny Perdue said about Northey, who farms near Spirit Lake, Iowa, in a recent press conference. “We’re anxious to get him up on the job.” Commodity groups have echoed that eagerness to have Northey approved and in place to help write the new Farm Bill.
(Source – https://www.agriculture.com/news/business/tax-reform-and-exports-top-senate-ag-priorities)