Tax Increase Proposal Concerns Ag, AFBF

Congressional Democrats have proposed increases in some taxes, some of special concern for agriculture.  USDA estimates the Tax Cuts and Jobs Act passed just over a year ago, will reduce taxes for producers by 3.3%.  So, American Farm Bureau tax adviser Pat Wolff said House and Senate proposals by Democrats to raise marginal, capital gains, and estate taxes, will have the opposite effect.

“So, if you take away the lower rates and changes in capital gains taxes, you’re looking at a significant tax increase for farmers and ranchers.”

She added a proposal to reduce the estate tax exemption from 11-million per person down to 3.5 million, would also disproportionately hurt producers.

“We haven’t had an estate tax exemption that low for years and years.  That would be a significant change and would significantly increase the number of farmers who would have to pay estate taxes and spend money on estate tax planning.”

Also in question, whether House Democrats would try to undo a sharp cut in taxes on small business ‘pass-through’ income, key for most farms that file returns as individuals, not corporations.  As for tax hike prospects, Wolff said it’s unlikely those kinds of changes could take place in a divided Congress.

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