Sam Fleming reported yesterday at The Financial Times Online that, “Republican tax reform plans risk falling foul of one of the most politically influential constituencies in the US as agriculture lobbyists warn that some in their sector could end up paying higher taxes because of the overhaul.
“In their drive to lower tax rates and simplify the system, the Trump administration and lawmakers are considering the elimination of a range of items businesses can deduct from their tax bills. Agriculture lobbyists are ramping up meetings on Capitol Hill to ensure their sector does not lose tax breaks that they say are critical to keeping the sector profitable.
“The administration insists that farmers and ranchers will be better off under the president’s plan. But that depends on the details that emerge in Congress. Agriculture is just one example of a broad array of sectors and industries that are battling to preserve cherished carveouts and deductions, in a lobbying blitz that will dog efforts to pass a tax bill this year.”
The FT article added that, “Farmers rely heavily on debt to buy their land, finance equipment and purchase seeds and other raw materials every year, with government estimates putting total farm debt at $385bn, meaning the minority of farmers who operate as companies could be hurt by limits on interest deductibility. The GOP’s framework tax plan leaves open the position on deductibility of interest for non-incorporated businesses, which would affect a much broader range of farmers.”
Mr. Fleming noted that, “Danielle Beck, director of government affairs at the National Cattlemen’s Beef Association, said that agriculture had ‘good allies’ in Congress including on the ways and means committee and they had been listening to the sector’s concerns. When it came to tax reform, however, ‘there are a lot of variables up in the air.'”
