At the Cattle Industry Summer Business Meeting, Senior Farm and Ranch Broadcaster, Ron Hays, is talking with National Cattlemen’s Association executive director of government affairs, Kent Bacus, about some of the tax policies that are in jeopardy of being discontinued by the end of 2025.
Coverage from the 2024 Cattle Industry Summer Business Meeting in San Diego is being powered by Farm Data Services of Stillwater.
The Tax Cuts and Jobs Act enacted by the Trump administration in 2017 benefits most farm and ranch businesses and allows them to build their operations and stimulate the agricultural economy. Important provisions of the act include reduced tax rates, the new business income deduction, provisions to allow the matching of income and expenses, immediate cost recovery, and an increase in the estate tax exemption. The Tax Reform Act is set to expire at the end of 2025 if nothing is done to preserve it.
“There is a tremendous knowledge gap on Capitol Hill,” Bacus said. “If you look at the members of congress and senators that were not elected the last time, they had to go through this big tax reform push. It just goes to show you that there is a big knowledge gap there.”
Bacus added that it is incumbent on organizations like the NCBA to educate political leaders on how the different provisions of the tax code, such as the estate tax, capital gains, 199A, gross depreciation, and section 178 expensing, matter to farmers and ranchers.
“Tax code can be pretty complicated, and in many ways, it’s not the ‘flashy’ issue that most people want to get involved in, but it affects every aspect of our businesses and livelihoods. That is why we all have to help put a face on all of the numbers and letters of the tax code,” he explained.
If the tax cuts are allowed to expire, the consequences to farmers and ranchers would be a tremendous blow to the agriculture industry and more. It will affect rural employment, rural economies, and many family-owned small businesses. The estate tax will roll back to the $5 million exemption level with a 40% tax rate, and that, along with the current state of inflation, factors into what can be offered to the next generation.
“We can’t take for granted the fact that we can enjoy this now,” Bacus remarked. “Because at the end of next year, it could be gone. So, we have to engage, but it’s not just that. We have a roughly $35 trillion national debt, and we have to find some way to pay that down, too. We’ve advocated very strongly, that we don’t do that on the backs of small business owners.”
Bacus warned not to fall into the trap of believing that the U.S. Government has revenue issues because, as he said, Uncle Sam has never failed to prove that he can get into the pockets of working Americans. This is proven, he said, by the fact that Americans are paying high income taxes and high tax rates on many other things.
“We have to do everything we can to help our elected officials understand that spending issues are definitely something that they need to address, but when it comes to revenue, we need those protections of the 2017 tax cuts and jobs act, so we can continue to employ people and have a strong economy that grows and circulates wealth, and continues to offer opportunities to the next generation of America’s food producers.
“Without that, it is going to be a tremendous disadvantage. It will create more burdens on the next generation of producers, and we don’t want that,” Bacus stated. “It is on us, in agriculture, not to act blindly, but to ask questions and hold our elected officials accountable.”
The NCBA’s mission is very involved in helping craft legislation and government policies, that producers can benefit from. They want to make provisions on the Federal level so that men and women who raise cattle can do so in a competitive environment, but also an environment that encourages reinvestment in their operations and allows for further employment of other people in rural communities. They know the importance of being prepared to set up the next generation for success.
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