American Farm Bureau
Tax Reform Package to Benefit Farmers, Ranchers
The following may be attributed to American Farm Bureau Federation President Zippy Duvall:
“The tax reform package passed by Congress this week will result in lower taxes for the vast majority of farmers and ranchers. This tax overhaul includes many changes to the tax code, most notably lower individual tax rates, that will benefit farmers and ranchers. Ninety-four percent of farmers and ranchers pay taxes as individuals, and those rates are coming down. The bill also maintains all of the important deductions and credits that farmers rely on. So, thanks to a lot of hard work by Congress and the administration, farmers will have both lower rates and all the tools they’ve always had to manage their businesses.
“Starting next year, farmers and ranchers will also be able to take a 20 percent deduction off their business income. That’s new, and it will reduce the taxes farmers owe. The bill also doubles the estate tax exemption to $11 million per person, which will provide relief to the vast majority of farmers and ranchers. We look forward to President Trump signing this bill. Most of the provisions in this tax bill are temporary, lasting for only seven years, so Farm Bureau will now focus our work on making those important tax deductions, lower rates and the estate tax exemption permanent.”
National Cotton Council
Tax Reform Welcome, Stronger Farm Policy Needed
The U.S. cotton industry is pleased with passage of the Tax Cuts and Jobs Act (H.R. 1) – legislation it supported that can spur economic growth by 1) lowering taxes and 2) simplifying the code for America’s cotton producers and associated businesses.
National Cotton Council (NCC) President/CEO Gary Adams wrote to Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI) thanking them for crafting and for shepherding through Congress a bill that will allow farm families to further invest in their operations and preserve that farm for future generations by allowing full and immediate expensing of capital purchases and doubling the estate tax exemption.
“As you know, many family farms are structured as pass-through entities, and we appreciate the provisions to specifically provide tax relief for these entities as well as a provision for cooperatives and their members given the loss of Section 199,” Adams stated in his letter. “The lowering of individual tax rates will further help alleviate the tax burden on farm families.”
Adams also noted that U.S. cotton producers continue to face low prices and high input costs while lacking an adequate farm bill safety net. As a result, a number of family cotton farms and other cotton businesses have been lost in recent years.
“We look forward to working with Congress, both in the near term and through the upcoming farm bill debate,” Adams stated, “to provide cotton farming families with the necessary policy improvements to withstand the unique challenges of cotton production and marketing. This tax reform bill will certainly be welcome news for our industry, yet there is still critically important work to do for the cotton industry by strengthening and improving the current farm bill to address the challenges facing our farm families today.”
The NCC is U.S. cotton’s central organization, and its members include producers, ginners, cottonseed processors and merchandisers, merchants, marketing cooperatives, warehousers, and textile manufacturers. Farms and businesses directly involved in the production, distribution and processing of cotton employ more than 125,000 workers and produce direct business revenue of more than $21 billion. Accounting for the ripple effect of cotton through the broader economy, direct and indirect employment surpasses 280,000 workers with economic activity of almost $100 billion.
Alabama Farmers Federation
Farmers Federation Applauds Final Passage of Tax Plan
Alabama farmers, families and businesses will benefit from the Tax Cuts & Jobs Act passed by Congress today, according to Alabama Farmers Federation President Jimmy Parnell.
“We congratulate members of the Senate and House of Representatives for working with President Trump’s administration to pass meaningful tax relief,” Parnell said. “This plan is a step toward simplifying our tax system and allowing individuals, families and businesses to keep more of their hard-earned money.”
The Senate gave approval to the measure by a 51-48 vote. Alabama Republican Sens. Richard Shelby and Luther Strange voted in favor of the plan. The House of Representatives passed the tax plan Tuesday but had to vote again today due to a procedural challenge by Senate Democrats. The final House vote was 224-201. Alabama Republican Reps. Bradley Byrne, Martha Roby, Mike Rogers, Robert Aderholt, and Gary Palmer voted “yes,” while Alabama Democratic Rep. Terri Sewell voted “no.” Rep. Mo Brooks, R-Ala., who is recovering from prostate cancer surgery, was not present for today’s vote but voted in favor of the bill yesterday.
President Donald J. Trump is expected to sign the bill before Christmas.
“While no tax legislation is perfect, this plan encourages investment and job creation,” Parnell said. “We have seen tremendous economic growth in our country, and these changes to the tax code will help America stay on a positive course.”
For farmers, the plan provides a 20 percent tax deduction for small businesses often taxed at individual rates under a “pass-through” provision. This change effectively caps their tax rate at 29.6 percent. This provision applies to 94 percent of farmers.
The plan also allows farms and businesses to immediately write off the full cost of new equipment; doubles the estate tax exemption; increases small business expensing limits under Section 179; and preserves deductions for customary business expenses including feed, seed and other inputs.
For families and individuals, tax relief comes in the form of lower tax rates; almost doubling of the standard deduction; expansion of the Child Tax Credit; and preservation of popular deductions including charitable contributions, mortgage interest and state and local taxes.
The plan also eliminates the individual mandate penalty tax of the Affordable Care Act and allows families to use 529 savings plans for elementary, secondary and higher education.