A short-term tax package that would restore full bonus depreciation and raise limits on the Section 179 expensing provision is now set to move next week in the House. Meanwhile in the Senate, the top Republican on the Senate Finance Committee is making clear that the bill shouldn’t set a precedent for offsetting the cost of future tax bills.
The cost of the House bill is offset by early termination of a pandemic-era employee retention credit. Idaho Republican Mike Crapo’s concern is that Congress faces a far bigger tax bill in 2025 when individual tax provisions in the 2017 Tax Cuts and Jobs Act expire.
Republicans have traditionally argued that tax cuts don’t have to be offset, and Crapo wants to make sure that continues to be the case. “If you take the TCJA for example, it was predicted to have a phenomenal cost, when in reality revenue to the Treasury went up dramatically when it was passed,” Crapo told reporters Wednesday. The projected cost of the TCJA wasn’t offset and Crapo said, “I don’t think that that precedent should be changed.”
Why it matters: The Tax Foundation estimates extending the TCJA provisions in 2025 could add several trillion dollars to the federal deficit.
By the way: Rep. Doug LaMalfa, R-Calif., is welcoming a provision in the bill that exempts wildfire relief payments from federal taxes. “I am optimistic that next week the House will vote on and pass this bipartisan bill,” he said in a statement.
Analysis: Trump slightly underperformed in rural NH
Former President Donald Trump did somewhat better with urban New Hampshire voters that he did in rural areas in Tuesday’s primary, according to an analysis by The Daily Yonder.
Trump won the state by 11 points, 54% to 43%. But Nikki Haley took 44.7% of the vote in rural counties while getting 42.7% of the vote in urban areas.
Crop insurance morphs into ‘commodity’ insurance
Federal crop insurance is rapidly turning into “commodity insurance.” So say a group of economists who cite the soaring growth in policies that cover dairy and livestock as well as forage and rangeland.
Insured liabilities for animals and animal products now amount to 11% of cash receipts from that sector, up from virtually no coverage in 2018. Meanwhile, insurance for crops now accounts for 69% of cash receipts, according to the report by the economists at The Ohio State University and the University of Illinois.
Overall, the ratio of insured liability to cash receipts for crops and animals and animal products has gone from 30% in 2018 to 41% in 2023.
Insurance coverage under Rain Index policies that protect forage and rangeland more than doubled from $3 billion in 2018 to $8 billion in 2023.
Similarly, purchasing of buy-up area coverage for crops also has increased significantly. Such buy-up coverage options such as STAX for cotton and the Supplemental Coverage Option for other crops accounted for 11% of the insured liability on cotton last year and 5% on corn.
Take note: Lawmakers are looking at increasing premium subsidies for those policies as part of the next farm bill, arguing that it will reduce demand for ad hoc disaster assistance.
Groups call for antitrust investigation into fertilizer acquisition
Groups that advocate for smaller-scale farms are urging the Justice Department and the Federal Trade Commission to scrutinize Koch Industries’ $3.6-billion-dollar purchase of an Iowa fertilizer facility.
It’s easy to be “in the know” about what’s happening in Washington, D.C. Sign up for a FREE month of Agri-Pulse news! Simply click here.
In a letter, groups including the Institute for Agriculture and Trade Policy and National Farmers Union say that the Iowa plant, which produces 2 million tons of fertilizer each year, was “built with substantial local, state, and federal investment, with its proponents citing the opportunity to challenge Koch Industries’ dominance in fertilizer markets.”
Koch is one of four companies that collectively control 75% of fertilizer markets, the letter says. adding, “Should the acquisition be allowed to proceed, taxpayers will have effectively subsidized the expansion of Koch’s control over a critical and heavily concentrated sector of our agricultural economy.”
Koch Industries didn’t immediately respond to a request for comment.
Industry, enviros find something to agree on
Environmental advocates and the meat industry disagreed on the appropriate level of regulation for meat and poultry processing plants at an online EPA hearing Wednesday. But both sides were in accord on this: They need more time to study the highly technical proposal that’s intended to reduce pollution from packing plants.
“EPA only scheduled two public hearings … one virtual and one in person,” said Larry Baldwin, a campaign coordinator for Waterkeeper in North Carolina. He and others called for hearings to be held in affected communities.
“Amazingly, I seem to agree with Larry Baldwin and Waterkeeper,” said Michael Formica, chief legal strategist at the National Pork Producers Council. “This is insufficient due process for all of the impacted stakeholders. EPA also needs to do extensive outreach to farmers who rely on these facilities to purchase and process their animals.”
Keep in mind: Industry representatives noted that EPA’s analysis of its “preferred option” in the proposal shows that 16 plants would shut down as a result. But environmentalists said that option would require pollution reductions for fewer than half the 3,800 slaughterhouses and meat processing plants nationwide.
The next hearing is Jan. 31 in Washington, D.C.
She said it. “I think not at this point. No.” – Sen. Susan Collins, R-Maine, on whether she would ever endorse Donald Trump’s presidential candidacy. Many of her GOP colleagues who had been neutral are starting to rally around the former president.
Steve Davies and Noah Wicks contributed to this report.
