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AFBF: Goal is to get farmers a lower tax rate

American Farm Bureau Federation (AFBF) tax policy specialist Pat Wolff says tax reform proposals being rolled out this week could have implications for farmers.  Details are being worked on by House and Senate leadership, tax-writing committee leaders and administration officials.  Wolff tells Brownfield the goal is to make sure farmers have a lower tax rate.

“There’s concern that if Congress decides to do away with a lot of deductions and credits that farmers find valuable; if they eliminate them in order to reduce the corporate tax rate, it could end up being a tax increase for farmers and ranchers,” Wolff told Brownfield Ag News Monday.

Wolff says there’s a possibility tax reform will include repeal of the estate tax, but she says a new concern is the possibility that the estate tax repeal could result in the elimination of the so-called stepped-up basis.

“That’s not a good idea,” said Wolff.  “Some farmers or ranchers could have a higher capital gains tax without stepped-up basis than they could paying the estate tax.”

Farmers also want to make sure they can continue to deduct interest expenses and can use cash accounting. That allows income from sales of crops and livestock to not be reported for tax purposes until it’s actually received.

AUDIO: Pat Wolff (6 min. MP3)