Impact of Tax Reform on Ag Unclear

Now that the tax reform package will officially become law in 2018, there is a lot of discussion of what that could mean for different industries in the U.S.

USDA Chief Economist Rob Johannson said it’s too early to tell, but there is some positives to take away from changes to the estate tax.

“Certainly with the lifelong exemption being increased to $11.2 million per individual and $22.4 million for a couple, that will help to that extent, but it was a small number of producers in the first place.”

Just two percent of farmers would have been subject to the estate tax prior to this revision.

Another benefit could come from the changing of tax brackets according to Johannson.

“Many producers are taxed at the individual tax rate as passed through businesses and that will help producers.”

Johannson said it could take a year to truly understand the impact the new tax law will have on the ag industry.