Tax changes help Iowa’s farmers
The new tax law passed by Congress late in 2017 and signed by President Donald Trump will help Iowa farmers, according to Sen. Charles Grassley.
The Iowa Republican is the senior member and former chairman of the Senate Finance Committee. He also serves on the Senate Agriculture Committee. He is one of only three GOP senators to sit on both committees. He worked hard during the debate in Congress concerning the tax changes to make sure that the provisions adopted would be beneficial to farmers and all other Iowans. He is especially well-qualified to assess how the new tax law will affect agriculture.
On Jan. 18, Grassley released a statement doing just that. Given the huge importance of the farm economy to the prosperity of our state, the senator’s perspective on how farmers will fare under the Tax Cuts and Jobs Act is relevant to everyone who calls Iowa home. According to Grassley, agriculture produces 20 percent of Iowa’s job and is 33 percent of the state’s economy.
The new law simplifies the tax law and provides tax cuts for most taxpayers. Here are the key changes it makes that Grassley says will especially help the farm community:
– It provides broad tax relief to small businesses including farmers and ranchers. That will make it easier for them to generate the capital necessary to invest more heavily in their enterprises.
– An expanded Section 179 of the tax code enhances the ability of farmers to finance overhead costs. More expenses can be deducted in the year they are incurred. Cash accounting is made more available to farmers.
– It lowers taxes on capital investments and has a business income deduction. These provisions that “will help level the playing field between farms that file as corporations and those that file as individuals.”
– A doubling of the estate tax exemption will make it easier for Iowans to keep farms in their family as they pass from one generation to the next.
The senator highlighted how the changes affecting individual taxpayers will advantage most Iowa farmers.
“More than 94 percent of farms are taxed under IRS provisions affecting individual taxpayers,” Grassley said. “The bulk of agricultural producers who operate outside the corporate tax code deserve basic fairness.”
He also lauded the changes in the estate tax but said the law does not go far enough.
“I support a full repeal of this unfair tax, but was pleased that in tax reform we were able to make significant progress in alleviating its burden on family farmers by doubling the estate tax exemption,” Grassley said. “According the Iowa Farm Bureau, given the price of farmland, about 30 percent of crop farms in Iowa exceeded the $5 million estate tax exemption in 2016 based on land values.”
Throughout his long service in Washington, Grassley has sought to make tax laws fairer and reduce the tax burden.
“I’ve long advocated for commonsense tax relief measures because they will help Iowa and the Midwest and will make life easier for middle class Americans,” Grassley said.
Farm News heartily agrees with that goal. We applaud Grassley for working diligently to move us closer to its achievement. The new tax law is a giant step in the right direction. Grassley deserves praise for helping bring about its enactment.
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