A “blank slate” approach to tax reform was recently announced in a letter sent to all senators by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah).
The tax reform process was described as assuming that all special tax provisions would be eliminated unless they were shown to help the economy grow, make the tax code fairer or promote important policy objectives. The goal of this process is to produce a simpler tax code with lower tax rates.
The Senate Finance Committee’s draft proposes changes that would increase the number of farmers who would be required to use accrual accounting rather than cash accounting and would set the amount of business purchases that could be taken as a tax deduction in the year of purchase at a level that is less than is allowed today.
According to American Farm Bureau, agriculture operates in a world of uncertainty; from product markets to fluctuating input prices, from uncertain weather to insect or disease outbreaks, it makes running a farm business challenging under the best of circumstances. Farmers need a tax code that recognizes the financial challenges they face.
Farmer input is needed, and Farm Bureau members have been asked to contact their representatives and senators to voice their opinions about what should and shouldn’t be part of a rewritten tax code.