The advancing House and Senate tax reform bills differ on estate tax elimination but are similar on expensing, pass-through income, and other provisions important for agriculture. The House bill expected on the floor this week has key differences with its Senate counterpart on corporate and personal taxes, including those of keen interest to agriculture.
The House phases out the estate tax by 2024 while the Senate doubles the size of estates exempt, thereby reducing the number of people who have to pay the tax. The House keeps the current ‘stepped-up’ basis while the Senate makes some adjustments.
American Farm Bureau’s Pat Wolff has lobbied for years for estate tax elimination, facing strong push-back by Democrats who charge it only helps the rich.
Meantime, both bills allow for continued immediate expensing of farm equipment under Section 179 of the tax code. And Senate Finance senior member Chuck Grassley points to a third similar provision.
But the House version creates a rate as low as 9-percent for some small-businesses so-called ‘pass-through’ income. House Ways and Means Chair Kevin Brady promises more changes, ahead.
House and Senate Republicans face key challenges, including meeting a budget requirement that allows the Senate GOP to pass a bill without Democratic votes and calming intra-party differences over ending breaks for state and local taxes.
From the National Association of Farm Broadcasting News Service.