GOP Tax Reform Break for Unincorporated Farming Operations Under Attack?

Dan Economy, Industry News Release

gop tax reformA key GOP tax reform break for unincorporated farming operations is under attack, but likely to be changed to answer Democratic critics.

Many Democrats charge the creation of a new, lower “pass-through” tax rate of 25 percent for unincorporated businesses that file as individuals, which most small farms do, allows for abuses. It’s a claim that GOP tax writers and farm groups have their eye on, as House lawmakers get ready to introduce their tax bill next week.

American Farm Bureau tax adviser, Pat Wolff.

Or, Wolff says, ‘pass-through’ businesses might incorporate to get the new, even-lower, 20-percent corporate tax rate.” She says Republicans are in talks on how to prevent such “shifting”.

Senate Finance member and former chairman Chuck Grassley argues there needs to be a built-in “differential,” say, 70-percent of income taxed at the 25 percent business rate, the rest, at the 35 percent personal income rate.

How that balance is set could help dissuade many from simply changing their business structure to take advantage of a tax change, likely to have a huge impact on agriculture’s bottom line.

From the National Association of Farm Broadcasting News Service.