WASHINGTON, Oct. 29, 2017 - House Republicans reveal the details of their tax reform plan this week as GOP leaders mount an ambitious pre-Thanksgiving campaign to get tax bills through both chambers before the holiday.
The House Ways and Means Committee plans to release its proposal on Wednesday and move it through the panel the week of Nov. 6. The Senate GOP schedule is a week behind the House.
The House bill’s authors have been keeping tight wraps on key details of the tax reform plan that will be critical to agriculture, including new rules for pass-through businesses and the fate of the estate tax and Section 1031 property exchanges.
Ways and Means Chairman Kevin Brady, R-Texas, said the GOP plan would overhaul a “miserably uncompetitive tax code and reinvigorate America’s economy – so our local businesses can grow and create more jobs, our workers can finally get a pay raise, and our families can keep more of what they earn.”
But there is concern that the provisions for pass-through businesses - sole proprietorships, partnerships and S-corporations - could backfire on farmers. Republicans want to lower the top tax rate for pass-throughs to 25 percent while imposing new rules, or “guardrails,” to prevent wealthy individuals from creating pass-throughs to lower their tax bills.
One idea that’s been on the table for limiting the use of the lower rate - deeming 70 percent of pass-through income to be wages rather than business profits - could significantly increase farmers’ taxes, said Paul Neiffer, an agricultural accountant based in Washington state.
The ranking Democrat on the House Agriculture Committee, Rep. Collin Peterson, who was an accountant before he came to Congress, said he warned Ivanka Trump in a recent meeting that the pass-through rules could create “the biggest tax shelter industry this country has ever seen” as entities seek to ensure income can qualify for the top rate on pass-throughs.
Other ideas that have raised concerns among agriculture interests include ending 1031 exchanges and limiting the use of stepped-up basis on inherited assets if the estate tax is repealed.
Also this week, Agriculture Secretary Sonny Perdue heads to Omaha to swear in Nebraska’s agriculture director, Greg Ibach, as USDA’s undersecretary for marketing and regulatory programs.
The Senate confirmed Ibach by voice vote on Thursday, but GOP leaders had to put off action on a companion nominee, Iowa Agriculture Secretary Bill Northey. Sen. Ted Cruz, R-Texas, put a hold on Northey’s nomination as undersecretary for farm and foreign agricultural services in response to commitments that the Trump administration made recently to Iowa political leaders on the Renewable Fuel Standard.
Cruz and eight colleagues have been demanding a meeting with administration officials to discuss the RFS issues.
Northey has run into no opposition to his nomination other than Cruz’ hold, which is unrelated to Northey or USDA. A lobbyist with ties to Texas agriculture said Northey has “real credibility” with that state’s farmers.
The House this week will be debating reforms to Forest Service management that would accelerate approval of logging plans by providing some new exclusions from the National Environmental Policy Act.
The Forest Service should use these exemptions “to expedite projects on forests that are identified as being at immediate risk of severe wildfire, insects and disease, as well as to protect watersheds, remove hazard trees that threaten public safety, and enhance wildlife habitat and to quickly rehabilitate a forest after a fire,” Nick Smith, executive director of the Healthy Forests, Healthy Communities coalition, wrote in The Hill.
The Resilient Federal Forests Act also would ease budget pressures by allowing the president to deem major wildfires to be a natural disaster, freeing up funding for fire suppression.
Some minor bills the House is expected to approve on Tuesday include the South Carolina Peanut Parity Act, which would add South Carolina to the Virginia-Carolina peanut-producing region for the purpose of appointing members to the Peanut Standards Board.
The National Forest System Vegetation Management Pilot Program Act would allow the Forest Service to undertake limited vegetation management near utility infrastructure outside of a right-of-way.
Here’s a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, Oct. 30
Agriculture Secretary Sonny Perdue swears in Greg Ibach as undersecretary for marketing and regulatory programs, Omaha, Neb.
National Milk Producers Federation annual meeting, through Wednesday, Anaheim, Calif.
4 p.m. - USDA releases weekly Crop Progress report.
Tuesday, Oct. 31
5 p.m. - House Rules Committee meeting on the Resilient Federal Forests Act of 2017, H-313 Capitol.
Wednesday, Nov. 1
National Chicken Council annual conference, though Thursday, The Four Seasons.
9 a.m. - Farm Foundation forum, “A New Paradigm for Conservation Work,” National Press Club.
Thursday, Nov. 2
8:30 a.m. - USDA releases Weekly Export Sales report.
10 a.m. - House Science, Space and Technology subcommittee hearing on agricultural research, 2318 Rayburn.
Friday, Nov. 3
1 p..m. - FDA Commissioner Scott Gottlieb speaks at the National Press Club.
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