WASHINGTON, Sept. 24, 2017 - Congressional Republicans will join the White House in rolling out a set of tax reform proposals this week that could have implications for farmers, depending on the mix of tax rates and deductions.
The issue is likely to dominate the congressional agenda this fall as GOP leaders and President Trump try to nail down a signal achievement that could be even more difficult to nail down than heath care.
President Trump will announce the plan on Wednesday, his legislative director, Marc Short, said on Fox News Sunday.
The Big Six group that has been negotiating the proposals has kept a tight lid on the details, which were still being worked on into the weekend. The Big Six consists of the chairman of the Senate and House tax-writing committees; Senate GOP leader Mitch McConnell, House Speaker Paul Ryan, Treasury Secretary Steven Mnuchin and Gary Cohn, chairman of the National Economic Council.
According to the Washington Post, Republicans were moving toward a deal that would lower the corporate tax rate to 20 percent, higher than the 15 percent President Trump wanted, and allow immediate expensing of capital purchases.
Farm groups want to make sure the plan at least does no harm to producers, who currently pay an effective tax rate of about 15 percent. Farmers already can fully write off capital purchases up to $500,000, thanks to the small-business Section 179 allowance, made permanent in 2015.
Farmers also want to make sure they can continue deducting interest expenses and using the cash accounting method. Under cash accounting, income from sales of crops and livestock isn’t reported for tax purposes until it’s actually received.
“At the end of the day, whatever the reform is has to reduce or at the very least not increase the net effective rate that farmers,” said Patricia Wolff, a senior director of congressional relations for the American Farm Bureau Federation.
The Farm Bureau also is calling for Congress to eliminate the estate tax.
Even as the tax proposals were being negotiated, Senate Republican leaders were pushing to make a last-ditch push to replace the Affordable Care Act this week, but Arizona Sen. John McCain’s announcement on Friday that he would oppose the latest proposal by Sens. Lindsay Graham, R-S.C., and Bill Cassidy, R-La., may have doomed the effort.
The budget reconciliation process that Republicans needed to use to enact an ACA replacement over unified Democratic opposition expires when the new fiscal year starts on Sunday.
Also this week, the third round of the negotiations on the North American Free Trade Agreement takes place in Ottawa. The talks, which started with the first round in Washington and then moved to Mexico City, started out with mundane tasks like all such negotiations do, but U.S. officials are beginning to demand that significant and controversial issues be addressed.
Commerce Secretary Wilbur Ross publicly called for tighter restrictions on automobile sales that would benefit U.S. manufacturers in a missive that was sent out before the negotiators even sat down for this current round of talks that began Saturday.
“If we don’t fix the rules of origin, negotiations on the rest of the agreement will fail to meaningfully shift the trade imbalance,” Ross said, adding new pressure to negotiators. “Our nation’s ballooning trade deficit has gutted American manufacturing, killed jobs and sapped our wealth.”
Even as the attention of GOP leaders turns to tax reform, lawmakers continue preparation for writing a new farm bill. The Senate Agriculture Committee holds a hearing Thursday on rural development and energy programs. Many of those are among the 37 expiring programs that have no funding, or baseline, after the 2014 farm bill expires.
In Kansas City on Thursday, Agri-Pulse and the Agribusiness Council of Kansas City will co-sponsor an Ag Outlook Forum that will include a focus on the next farm bill.
The speakers will include Kansas City Federal Reserve President Esther George, as well as John Lagemann, a senior vice president with Deere and Co.; Brian Hancock, executive vice president and chief marketing officer, Kansas City Southern; Brian Sikes, corporate vice president with Cargill Inc.; and Agri-Pulse President Sara Wyant.
Here’s a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, Sept. 25
CropLife America annual meeting, through Wednesday, Laguna Niguel, Calif.
North American Free Trade Agreement negotiations, through Wednesday, in Ottawa.
9 a.m. - USDA releases monthly Food Price Outlook.
4 p.m. - USDA releases weekly Crop Progress report.
Tuesday, Sept. 26
National Academy of Sciences conference on infrastructure, through Wednesday, Keck Center, 500 5th Street NW.
National Association of Wheat Growers hold policy Fly-in, through Wednesday.
Women in Agribusiness summit, through Thursday, Minneapolis.
CropLife America annual meeting.
NAFTA negotiations.
NAWG Fly-in, Washington.
10 a.m. - Senate Energy and Natural Resources Committee hearing on Energy Department nominees, 366 Dirksen.
2:30 p.m. - Senate Commerce, Science and Transportation subcommittee hearing on proposals to reform the Federal Trade Commission, 253 Russell.
Wednesday, Sept. 27
Comment closes on the administration’s proposed rule to review and revise the waters of the United States (WOTUS) rule.
NAFTA negotiations.
NAS infrastructure conference.
10 a.m. - House Agriculture Committee hearing on the Commodity Futures Trading Commission’s agenda, 1300 Longworth.
11 a.m. - House Small Business Committee hearing on the impact of tax reform on small businesses, 1300 Longworth.
2 p.m. - House Natural Resources subcommittee hearing on wildfires in the national forests, 1334 Longworth.
Thursday, Sept. 28
Ag Outlook Forum, Kansas City.
8:30 a.m. - USDA releases Weekly Export Sales report.
9:30 a.m. - House Judiciary Committee hearing on agency compliance with the Congressional Review Act, 2141 Rayburn.
9:30 a.m. - Senate Agriculture Committee hearing on rural development and energy programs in the farm bill, 216 Hart.
3 p.m. - USDA releases Hogs and Pigs report.
Friday, Sept. 29
Noon - USDA releases Grain Stocks report.
12:30 p.m. - FDA Commissioner Scott Gottlieb speaks at the National Press Club.
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