DTN Ag Policy Editor Chris Clayton reported yesterday that, “House Republicans released a long-awaited tax-reform and tax-cutting plan that lowers tax rates for corporations and families, but forces both businesses and families to give up or reduce some favorite long-standing tax breaks.
“‘This is a complete redesign of the (Tax) Code,’ said Rep. Kevin Brady, R-Texas, chairman of the Ways and Means Committee.
“Brady’s committee is set to mark up and debate the plan [full plan; summary] in committee starting next Monday.”
Mr. Clayton explained that, “The bill would cut the corporate tax rate from 35% to 20%, a foundation set early in the debate over tax reform. Businesses would get immediate expensing of capital costs, but business interest would be limited and other tax deductions and tax credits would go away.
“For individuals and families, the bill cuts individual tax brackets from seven to four: 39.6%, 35%, 25% and 12%. The standard deduction would be doubled, but limit state and local tax deductions, as well as other items on the Schedule A. The Child Tax Credit would be boosted for families from $1,000 per child to $1,600. A special $300 tax credit would be added for people who take care of a parent or another non-child dependent.
“The bill would limit mortgage interest deductions at $500,000. That prompted the National Association of Realtors and National Association of Home Builders to oppose the tax plan.”
The DTN article noted that, “In a victory for farm groups who pressed on the estate tax, the bill doubles the estate-tax exemption to $11 million for individuals, up from $5.49 million. The estate tax is phased out entirely after 2023.”
Yesterday’s article added that, “The National Council of Famer Cooperatives had warned last week that eliminating the deduction for domestic production activities would translate to $2 billion in lost tax breaks for farmers. Still, the deduction is eliminated in the bill.
“The National Biodiesel Board stated its members ‘are disappointed in this first draft’ of the legislation because it does not include an extension of biodiesel tax incentives. NBB added it would work with Congress ‘to craft a robust, biodiesel tax incentive.’
“In an area that could becoming a sticking point for farmers with high property-tax bills, the legislation limits the state and local-taxes deduction, capping them at $10,000.”
