The advancing House and Senate tax reform bills differ on estate tax elimination but are similar on expensing, pass-through income, and other provisions important for agriculture. The House bill expected on the floor this week. The House phases out the estate tax by 2024 while the Senate doubles the size of estates exempt, thereby reducing the number of people who have to pay the tax. The House keeps the current ‘stepped-up’ basis while the Senate makes some adjustments.
American Farm Bureau’s Pat Wolff has lobbied for years for estate tax elimination, facing strong push-back by Democrats who charge it only helps the rich.
“That’s just not true,” Wolff said. “The Estate Tax impacts farmers and ranchers and other family businesses who are middle income and who need the Estate Tax repealed so they can continue their business into the next generation.”
Meantime, both bills allow for continued immediate expensing of farm equipment under Section 179 of the tax code. And Senate Finance senior member Chuck Grassley points to a third similar provision.
“I think agriculture will benefit from the small business bracket of 25%, 70% of income would be considered wages and salaries and 30% would be considered capital that would be taxed at the 25% level,” Grassley said.
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