AFBF lays out tax reform wish listPosted on Apr 9, 2013
WASHINGTON, D.C., April 9, 2013 – Individual tax code reform is essential for farmers and ranchers, the American Farm Bureau Federation said today in a statement submitted to the House Small Business Committee. According to AFBF, tax reform must be simple, transparent, revenue-neutral and fair to farmers and ranchers.
“Any tax reform proposal considered by Congress must be comprehensive and include individual tax reform,” AFBF stated. “More than 96 percent of farms and 75 percent of farm sales are taxed under IRS provisions for individual taxpayers.”
Although broadening the tax base and lowering the rate are important parts of tax reform, lawmakers should note that lowering rates will impact farms and ranches differently than other businesses because farmers’ and ranchers’ income can swing wildly as a result of unpredictable weather and uncontrollable markets, cautioned AFBF. Farm and ranch income varies greatly from year to year with loss years often outnumbering those that are profitable.
Farm Bureau also supports the continuation of unrestricted cash accounting for farmers and ranchers who pay taxes as individuals and cautioned against reducing the number of farms classified as corporate that are eligible to use cash accounting.
“Capital gains taxes continue to be a problem for farmers and ranchers,” continued the statement. “In addition to capital gains taxes imposed when land and buildings are sold, proceeds from the sale of cattle used for breeding, dairy, draft and some other livestock are treated as capital gains income.”
Like capital gains taxes, estate taxes continue to be one of the most worrisome tax issues facing farmers and ranchers, said AFBF. About 85 percent of farm and ranch assets are tied up in land, buildings or breeding animals, leaving farmers with few options for generating cash to pay the estate tax.
With agriculture cropland values increasing on average 15 percent from 2011 to 2012, more farms are in danger of topping the current $5 million exemption, and estate tax planning continues to be complex and expensive for those close to or over the threshold. AFBF supports permanent repeal of the estate tax.
Source: Press release courtesy of American Farm Bureau Federation
Tagged Post Topics Include: AFBF, Capital Gains Tax, Estate tax, House Small Business Committee, Tax Reform