By Jessica Domel
Multimedia Reporter
As lawmakers in Washington, D.C. prepare to conference the Senate and House passed tax reform bills into a single piece of legislation, Texas Farm Bureau (TFB) remains involved in the process on behalf of its more 500,000 member-families.
“We’ve been weighing in on the process both in the House and of course, lately, the Senate,” Laramie Adams, national legislative director for TFB, said. “Senate passage is huge for agriculture. There are provisions in the bill that will help farmers and ranchers as they continue to struggle with uncertain markets and uncertain weather. As we go forward, we see both the Senate and House versions helping.”
The Senate passed its version of the Tax Cuts and Jobs Act before 2 a.m. Dec. 2 in a 51-49 party line vote.
To garner the necessary amount of votes needed to pass the bill, modifications were made to the legislation on the floor.
The deduction for pass-through business income increased from 17.4 percent to 23 percent.
A provision also extends 100 percent expensing for businesses by four additional years to nine years but gradually decreases the provision over time.
Senate Republicans did not repeal the Alternative Minimum Tax. They did, however, increase the threshold at which individual taxpayers must pay the tax, according to the American Farm Bureau Federation (AFBF).
The bill was also modified on the floor to add a deduction for up to $10,000 for local property taxes paid, which is identical to a provision in the House passed bill.
The new Senate bill also allows medical expenses to be deducted if they exceed 7.5 percent of a taxpayer’s adjusted gross income, rather than the 10 percent threshold under current law.
The Senate-passed bill also calls for a doubling of the estate, or death, tax exemption to $11 million per individual. The House version calls for an increase in the deduction with a full repeal after six years.
“We advocate for completely scrapping the death tax,” Adams said. “Any time that a farmer or rancher passes away and wants to pass that land down to the next generation, to their kids, they shouldn’t be taxed on it.”
Now that both chambers have passed tax reform plans, the bills will go to a conference committee where leaders will have to work through key differences to form a single piece of legislation to send to the president.
“Texas Farm Bureau is going to be diligent,” Adams said. “We have to continue to weigh in on the process. This is not over by any means.”
TFB staff will stay involved as Congress moves forward with tax reform.
“We will be looking at the process and weighing in with Chairman Brady, Chairman of the House Ways and Means Committee, who is a champion for agriculture as well as our senator who is on the finance committee, Senator John Cornyn,” Adams said. “He’s been great for Texas Farm Bureau and great for our members. We’ll check in with Senator Ted Cruz as well. He was very key in helping us get some of the provisions we wanted. We want to make sure that we are staying engaged and making sure that we don’t let anything slip by us.”
AFBF is also involved in the process. Prior to the Senate vote, AFBF President Zippy Duvall sent a letter to the full Senate commending the chamber for advancing a bold proposal to reform the nation’s tax code for the first time in 30 years.
“The lower individual tax rates and the new business income deduction contained in the bill hold the potential to reduce income taxes for farmers and ranchers,” Duvall said.
Following the vote, Duvall said farmers and ranchers have long called for a tax code that recognizes their hard work as well as the unique challenges they face in growing the nation’s food, fiber and fuel.
“The Senate’s passage of tax reform legislation today puts us within reach of that goal,” Duvall said. “We applaud the Senate’s commitment to key tax provisions farm and ranch businesses depend on, such as immediate expensing, business interest deduction and cash accounting. While we also had hoped to see the estate tax finally put to death, increasing the exemption should bring relief for many farm and ranch families looking to preserve their agricultural legacy.”
Congressional Republicans say they hope to have the bill on the president’s desk by Christmas.