Farm groups are breathing a collective sigh of relief that congressional Democrats have dropped the idea of taxing capital gains at death, preserving the benefits of stepped-up basis. But many may still need to start talking to their tax advisers about just what’s in the legislation and how it could affect their tax planning.
The legislation that the House Ways and Means Committee is debating this week would cut the estate tax exemption to the 2010 level of $5 million, adjusted for inflation. But there’s another change in the bill, an increased property valuation reduction, that could offset the impact of cutting the exemption, which is now $11.7 million.
Other changes that could affect some farms include changes in corporate tax rates and an increase in individual income taxes for higher earners.
Bottom line: “There is a high likelihood that some form of this legislation will become law before the end of the year. People should not wait to get on top of these changes,” said Brian Kuehl of KCoe Isom, an accounting and consulting firm.
The tax package would help pay for the cost of Democrats’ $3.5 trillion Build Back Better spending plan. However, the tax section may shrink before the bill gets to the finish line since at least two Democratic senators say they won't support legislation that big.
Follow all our coverage of the developing bill at Agri-Pulse.com
Biden nominates almond exec as ag trade negotiator
Moving to fill a position considered hugely important for the ag sector, President Joe Biden says he plans to nominate Elaine Trevino, president of the Almond Alliance of California and former deputy secretary at the California Department of Food and Agriculture, as ag trade negotiator at the Office of the U.S. Trade Representative.
Trevino has led the alliance since April 2018. With her – if confirmed – addition to the administration, California’s tree nut farmers will be well represented: Jenny Lester Moffitt, USDA’s new undersecretary for Marketing and Regulatory Programs, managed her family’s organic walnut farm for three years.
Speaking of trade: Some 77 ag and food associations are urging the Biden administration to take a more “active role” in making sure overseas exporters aren’t dictating U.S. exports. The groups say more than 70% of containers are departing the West Coast with nothing in them.
“Right now, imports seem to be enjoying the equivalent of an eight-lane highway while our exports have been relegated to narrow country roads; that’s not right and we know that Congress and the Administration can take steps to create fairer trading practices,” the letter to President Joe Biden says.
Ag groups demand fix to jet fuel credit
Farm and biofuel industry groups are appealing to Democrats to rework a proposed new tax incentive for renewable jet fuel to make sure vegetable oils and corn ethanol would qualify as feedstocks.
The tax credit for sustainable aviation fuel, or SAF, would vary from $1.25 to $1.75. But the industry groups say domestic ag commodities would largely be ineligible because of a requirement that the carbon impact be measured according to a methodology adopted by the International Civil Aviation Organization.
“Because biomass feedstocks are essential SAF sources, it is imperative that tax credits and other programs properly account for the lifecycle emissions of these sources and the petroleum products these new fuels will replace,” the groups say in a letter to congressional leaders.
JBS expects plant back online today
A Grand Island, Nebraska, beef packing plant is expected to resume production today after a fire shuttered the facility on Monday.
According to a JBS spokesperson, the fire “did not impact our primary production areas.” The company expects to restart operations Tuesday, but cautioned Monday afternoon that reopening is “pending ongoing assessment of the situation.”
The facility, which is the area’s largest employer and has an annual production capacity of about 1.4 million head of cattle, did not operate on Monday after the fire.
RFA analysis: High gas prices not caused by biofuel credit compliance
A new analysis by the Renewable Fuels Association suggests Renewable Fuel Standard compliance credits are not causing higher retail gas prices.
The organization says higher gas prices are instead being caused by higher crude oil prices — not the price of Renewable Identification Numbers that oil refiners use to demonstrate compliance with the RFS.
“Higher gasoline prices this summer were caused primarily by OPEC+ oil production cutbacks and an increase in gasoline demand,” said Scott Richman, chief economist at RFA. He said the Colonial Pipeline shutdown and Hurricane Ida have also put pressure on prices.
Pointing to Energy Information Administration data, Richman said there is a strong correlation between crude oil prices and supply and demand factors for retail gasoline.
The American Fuel & Petrochemical Manufacturers, which launched an ad campaign in July attacking what it called “the ethanol gasoline tax,” says RFS compliance costs for 2021 “are likely to near $30 billion.”
Bipartisan Policy Center report recommends ways to increase food security
A task force including two former ag secretaries, a world-renowned chef and the heads of two influential food and ag groups wants to retain COVID-related waivers that allowed access to federal nutrition programs.
The Bipartisan Policy Center task force — made up of Chef José Andrés, Food Industry Association President Leslie Sarasin, American Farm Bureau Federation President Zippy Duvall and former Ag secretaries Dan Glickman and Ann Veneman — released a report Monday recommending nine policy changes to strengthen food security during and after the COVID-19 pandemic.
The group also said it wants Congress and the Biden administration to develop a standardized federal definition for “nutrition security” and support accessibility of fruits and vegetables in federal feeding programs.
“Some of the task force recommendations could reduce future expenditures by improving health outcomes and reducing federal healthcare and other preventable costs,” said Veneman, who served as Secretary of Agriculture during the Bush administration.
NRECA blasts Dems’ clean electricity program as ‘unrealistic’
Rural electric providers are criticizing the Clean Electricity Performance Program in the House Energy and Commerce Committee’s portion of the reconciliation package, which the committee is considering.
The $150 billion program would reward utilities that increase their use of clean energy by 4% annually and penalize those that don’t.
But National Rural Electric Cooperative Association CEO Jim Matheson told committee leaders in a letter Monday that the program’s 10-year window is “unrealistic” because of longer-term existing contractual obligations.
He also called the bill’s clean energy targets “too aggressive,” adding that “a year-over-year 4% increase in clean electricity deployment is not attainable for many of our members.”
Lastly, the CEPP “makes a significant mistake by requiring compliance on load-serving entities,” Matheson said. “Many electric cooperatives are relatively small distribution entities that own little, if any, generation.”
He said it: “We cannot afford partisanship when it comes to food, to nutrition and to hunger.” — Chef José Andrés at a Bipartisan Policy Center event Monday.
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Monday, December 02, 2024