House Republicans Suggest Tax Reforms
In late June, House Republicans issued a proposal strongly influenced by Speaker Paul Ryan that addresses tax reform. While the elections will determine the probability of any action, it is important for agriculture to remain aware and to understand the changes put forth in the proposal. Perhaps the most positive aspect is that the proposal eliminates the estate tax. Noteworthy for growers is that all business income that flows through from partnerships and S corporations will be subject to top tax rate of 25 percent, and any capital purchase not including land is fully deductible in the year of purchase. Other changes include elimination of the ability to deduct net business interest and the elimination of the interest expense deduction when purchasing land or equipment. The plan proposes a top rate for individuals of 25 percent with only home mortgage interest and charitable contributions remaining deductible. Ag groups are beginning to meet to evaluate the proposal.