Republican U.S. Sen. Chuck Grassley of Iowa has released this op-ed about agriculture and today’s farmers.
It’s been more than three decades since Congress passed significant tax reform legislation. Since then, the tax code has become overwhelming in both its size and complexity, burdening working families and small businesses across the country. At this point, it’s clear an outdated and over-complicated code is keeping the nation, including American agriculture, from realizing its full economic potential. Reform is long overdue.
Passing tax reform would be a big win for Americans of every income level and walk of life. The Tax Cuts and Jobs Act lowers rates, doubles the child tax credit and simplifies the filing process. It would help raise workers’ wages and bring back and create new jobs by making the United States more competitive with other countries. Tax reform will help rural America, much of which has been struggling economically for far too long.
As one of only three Republican senators on both the Finance and Agriculture Committees, I’ve made it a priority to represent agriculture and the family farmer throughout the tax reform debate. This legislation is a once-in-a-generation opportunity to make real and long-lasting reforms for farmers, ranchers and every American working in our agriculture industries.
Broadly speaking, across-the-board rate reductions will let Americans keep more of their own money. This would afford farmers the opportunity to reinvest in their operations instead of sending that financial capital to politicians in Washington.
Tax reform legislation expands Section 179 of the tax code, which helps farmers finance overhead costs. It enables farmers to deduct more expenses in the year they are incurred, and also expands the availability of cash accounting to more farmers in Iowa and throughout the country. These provisions will allow farmers to invest in the equipment necessary to do the job of feeding the nation and the world.
The Tax Cuts and Jobs Act lowers taxes on capital investments and includes a business income deduction, which will help level the playing field between farms that file as corporations and those that file as individuals. More than 94 percent of farms are taxed under IRS provisions affecting individual taxpayers. The bulk of agricultural producers who operate outside the corporate tax code deserve basic fairness. This legislation makes sure that those taxed under the individual and corporate tax codes are treated similarly.
One of the most frequently discussed issues in the tax reform discussion is the estate tax, which can force family farms to break up their operations to pay the IRS following the death of a family member. I support a full repeal of this unfair tax, and the Senate’s legislation makes significant progress by doubling the estate tax exemption. This substantial change would let more family farmers pass their hard-earned life’s work on to their children, paving the way for the next generation of family farmers.
I’ve long advocated for these commonsense measures because they will help Iowa and the Midwest and will make life easier for middle class Americans. Farmers’ hard work provides the healthy and affordable food that we so often take for granted. We should do everything in our power to support them and create an environment where these small businesses and hardworking families can thrive and prosper. That’s what tax reform will do for farmers, for Iowans and for all Americans.
Sen. Chuck Grassley of Iowa is a lifelong family farmer, a member of the Senate Agriculture Committee and a senior member and former chairman of the Senate Finance Committee, which has jurisdiction over tax policy.