Tax Reform (Executive Session)
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I rise to discuss the positive impact the Tax Cuts and Jobs Act will have on Iowa farmers. Of course, our Iowa agricultural economy is…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I rise to discuss the positive impact the Tax Cuts and Jobs Act will have on Iowa farmers.
Of course, our Iowa agricultural economy is really important, and those men and women who are serving as farmers, ranchers, and growers in the State of Iowa mean the world to me, coming from a farm my family had in Southwest Iowa.
We all understand this has been a very challenging time for farmers in our rural communities. The community I come from in Southwest Iowa has just 10,000 people in our county. Many of them have faced the challenges of the economic downturn. Since their peaks in 2012, corn prices have declined by 60 percent and soybean prices have declined by 47 percent. My neighbors are hurting, folks. Farm income has nearly been cut in half since 2013.
A lot of our producers are hurting, especially our young and beginning farmers who have gotten their start just in maybe the last 10 years or so, but, fortunately for our farmers, our ranchers, and our growers, tax relief is on its way. The Tax Cuts and Jobs Act will provide sweeping tax cuts for farmers and rural communities, allowing our producers to keep more of those hard-earned dollars.
About 95 percent of farms are organized as passthrough businesses, such as sole proprietorships, partnerships, and S corps. These businesses are taxed under individual tax rules and will benefit from lower tax rates for every income bracket. On top of that, they will see significant relief through a new 20-percent deduction on passthrough business income. The law also provides relief from the costly individual mandate which forced many farmers to choose between buying an expensive ObamaCare plan through their State exchange or being fined.
Now, just a couple of years ago, I remember a very intense conversation I had with a beginning farmer in Northeast Iowa. When he was purchasing his insurance through the State exchange, the cost had more than doubled. He was shaking he was so upset about it, and he explained to me the additional cost of that individual policy was his truck payment. There was no room in his budget for the additional cost of that insurance policy so he had to make that choice: Do I purchase through the individual exchange or do I make my truck payment? Fortunately, within this bill, we have that relief. He can make that choice, and the choice is his on whether he makes that truck payment and forgoes the insurance or whether now he can do without that type of insurance and not be fined because he was too poor to afford it.
In addition, the bill dramatically expands section 179 expensing and allows 5 years of 100 bonus depreciation. Both of these changes will foster much needed investment in farms throughout Iowa.
The law also preserves a number of important tax provisions for farmers, including the interest deduction, cash accounting, and the use of like-kind exchanges for property.
Last, but certainly not least, the Tax Cuts and Jobs Act doubles the Federal estate tax exemption while preserving the stepped-up basis. The death tax can have a devastating impact on family farms. Over 90 percent of farm assets cannot be sold easily without losing value. Especially as we continue to experience a downturn in that ag economy, family farmers are sometimes left with no choice but to sell land or the equipment they use to farm that land when they are forced to pay that tax.
The Tax Cuts and Jobs Act is a big step in the right direction for agriculture. I am thankful to the President for his leadership and to my colleagues in the Senate and the House for helping get this long- needed bill done. On behalf of agriculture, thank you.
I suggest the absence of a quorum.