Bye Bye Election, Hello Tax Policy

Tax policy will be on the line for farmers and many others next year as a new Congress and administration grapple with what to do with the expiring 2017 tax cuts. The first casualty of the 2017 law expiring at the end of next year will be the estate tax exemption.

Longtime Senate Finance Committee member and former Chair Chuck Grassley…

“If it expires, (the) estate tax is going to be cut in half. And I think that’d be a major concern.”

The lifetime exemption will revert to about $7 million for individuals and $14 million for married couples. Then, the tax break for pass-through income claimed on personal returns…

“The 20 percent deduction for pass-through income affects small businesses and farmers, but it would surely affect farmers.”

Farmers trying to avoid double taxation on their operations and personal income.

Aside from the lapsing 2017 tax law, there are proposals to tax unrealized gains on investments and property…

“If they consider the value of farmland being inflated, maybe one, two, three, four, five percent from year to year, how do you determine how much a specific farm went up.”

And even closer to the pocketbook…

“If farmers take advantage of the 401K-like things that farmers and small businesses can participate in, obviously, you can determine the inside build-up of that, and that can be taxed.”

A terrible idea, Grassley argues, producing short-term gains for the government at the expense of long-term when savings are withdrawn.