By KEVIN WALKER
Michigan Correspondent WASHINGTON, D.C. — President Donald Trump signed into law his major tax bill Dec. 22, after technical problems had threatened to delay the signing into the new year. The legislation is a $1.5 trillion tax overhaul offering big cuts for business, which are permanent, and smaller ones for the middle class, which are temporary. The legislation doubles the standard deduction for taxpayers, but also eliminates the personal exemption. Advocates of the legislation have said they hope the tax cuts for the middle class will eventually be renewed. According to a Bloomberg Politics report dated Dec. 22, Congress the day before cleared the way for Trump’s signing by waiving automatic spending cuts that would have been triggered in January due to the $1.5 trillion revenue loss the bill would cause. The stopgap spending bill keeps the federal government operating until Jan. 19, waiving cuts in all future years due to the tax bill under the 2010 PAYGO law. Earlier reports said Trump might not be able to sign the law until Jan. 3. “Corporations are going wild over this, way beyond my expectations,” Trump said from the Oval Office late in the morning on Dec. 22. “Many of you have worked very, very hard and we appreciate that. “Democrats had this typical thing, ‘It’s for the rich.’ It’s not true. They regret it already.” USDA Secretary Sonny Perdue praised passage of the tax changes, stating after it passed in Congress that it’s a “once in-a-generation reform of the federal tax code, and it comes just in time to be an eagerly awaited Christmas present for taxpayers. “Having traveled through our nation’s heartland for most of this year, I know that the hard-working, taxpaying people of American agriculture need relief. Most family farms are run as small businesses and they should be able to keep more of what they earn to reinvest in their operations and take care of their families. “Simplifying the tax code and easing the burden on citizens will free them up to make choices for themselves, create jobs and boost the overall American economy,” he added. Farm groups had mixed reactions to the legislation after it was finally passed late in the day on Dec. 20. According to a statement from the National Farmers Union (NFU), the Tax Cuts and Jobs Act will leave a “$1.5 trillion hole in the budget – a hole that some members of Congress will want to fill with farm program and entitlement spending cuts.” It went on to explain that the group opposed the legislation because of its “regressive taxation structure.” According to the NFU, the increase to the deficit due to the tax changes will place farm program and entitlement funding “on the chopping block.” “Farmers Union is deeply disappointed in Congress’ decision to approve the Tax Cuts and Jobs Act, not only because it is flawed fiscal policy, but also because we must now fight to protect every penny that is spent securing our nation’s food supply and natural resources, supporting our rural communities and feeding our hungry,” said NFU President Roger Johnson. On the other hand, American Farm Bureau Federation President Zippy Duvall said the tax deal will “result in lower taxes for the vast majority of farmers and ranchers.” According to a Dec. 21 statement from the American Soybean Assoc. (ASA), the final agreement sets the corporate tax rate at 21 percent and the top tax rate for individuals at 37 percent. Pass-through businesses that pay taxes through the individual side of the tax code would get a 20 percent deduction. Other areas of interest to farmers include the following: regarding interest deduction, the deal maintains the ability to deduct business interest for entities with gross receipts under $25 million. The deal maintains the ability of farm operations to use the cash method of accounting and also maintains stepped-up basis. Also, full and immediate expensing of purchases will be allowed with the benefit phasing out by 20 percent every year after 2022. The Section 179 expensing limits increase to $1 million, from the current $500,000, and the phase-out threshold is boosted to $2.5 million. Regarding the estate tax, the exemption level is doubled from $5.49 million to $11 million for individuals, and to $22 million for couples. The final agreement does not fully repeal the estate tax, as the House bill had proposed to do after six years. To see the ASA’s analysis online, go to https://soygrowers.com/congress-passes-tax-reform-affect |
