House & Senate Bills Differ on Elimination of Estate Tax

 

The advancing House and Senate tax reform bills differ on estate tax elimination but are similar on expensing, pass-through income, and other provisions important for agriculture. The House bill expected on the floor this week has key differences with its Senate counterpart on corporate and personal taxes, including those of keen interest to agriculture.

The House phases out the estate tax by 2024 while the Senate doubles the size of estates exempt, thereby reducing the number of people who have to pay the tax. The House keeps the current ‘stepped-up’ basis while the Senate makes some adjustments.

American Farm Bureau’s Pat Wolff has lobbied for years for estate tax elimination, facing strong push-back by Democrats who charge it only helps the rich…

“That’s just not true.  The estate tax impacts farmers and ranchers and other family businesses who are middle income who need the estate tax repealed so they can continue their businesses into the next generation.”

Meantime, both bills allow for continued immediate expensing of farm equipment under Section 179 of the tax code. And Senate Finance senior member Chuck Grassley points to a third similar provision…

“I think agriculture will benefit from the small business tax bracket of 25%.  Seventy percent of income would be considered wages and salaries, and 30% of income would be considered capital that would be taxed at the 25% level.”

But the House version creates a rate as low as 9-percent for some small-businesses so-called ‘pass-through’ income. House Ways and Means Chair Kevin Brady promises more changes, ahead…

“Let me assure you this is the beginning of the tax reform process.  We intend to work to improve this bill at every step of the process, and I continue to welcome your input.”

House and Senate Republicans face key challenges, including meeting a budget requirement that allows the Senate GOP to pass a bill without Democrat votes and calming intraparty differences over ending breaks for state and local taxes.


A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.

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