AFBF: GOP Can’t Agree On Tax Issues

Republican differences over how to pay for tax reform are slowing down efforts in Washington DC.  When meeting with Congressional tax writers, the President has been pushing for  bills to reduce corporate and individual taxes.  But doing so, will take attaching tax reform to a budget bill that has different rules and can’t be filibustered like taxes.  Few Senate Democrats are expected to vote for a GOP tax bill.

But GOP conservatives want new tax cuts paid for with offsetting savings, by eliminating other breaks.  Trillions in government revenue could be lost by the president’s plan to sharply reduce rates for businesses and individuals.  American Farm Bureau Senior Economist Bob Young said GOP division is impacting the process.

“In terms of just a budget bill that they’re going to actually use as the vehicle to carry the tax reform bill.  If you can’t get agreement among the Republicans on what ought to be in the budget bill, what you’re going to cut, what you’re not going to cut.  If you can’t get agreement on that front then you can’t move forward.”

Young points out that both chambers have to pass the budget bill.  Tax reform is made more complicated for agriculture, if the GOP eliminates key tax breaks producers want, like lower capital gains rates, an end to the estate tax and others.

“There has been some conversation that we’ll just do corporate tax reform.  The problem is most farmers, the vast majority of farmers don’t file as a corporation they file individually.  And so, if we’re going to talk about getting rid of some deductions that they’re currently able to use, by getting rid of the deductions, then you’re basically saying they’re going to pay more in taxes.”

The White House is considering scaling back the very popular mortgage interest deduction, and ending that for state and local taxes.  None of this makes the process easier, which is probably why tax reform hasn’t happened since 1986.

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