WASHINGTON, D.C. – Today, Congresswoman Lynn Jenkins (KS-02) testified before the House Agriculture
Committee on how tax reform can help the agriculture economy and rural way of life.
The following are Congresswoman Jenkins’ remarks as prepared for delivery:
Chairman
Conaway, Ranking Member Peterson, and honorable members of the House
Agriculture Committee, thank you for the opportunity to testify before
you this morning to discuss
the important topic of tax reform and the potential it has to help the
agriculture economy and rural way of life in America. Mr. Chairman, as
fellow CPAs, I know that we both understand the opportunity that tax
reform can unlock in this space. I would also
like to echo the remarks of my colleague on the House Ways and Means
Committee, Congresswoman Noem, regarding the importance of eliminating
the death tax and allowing interest deductibility for farmers and
ranchers.
I
was raised on a dairy farm in Holton, Kansas, and I can speak with
firsthand knowledge about the challenges and rewards that come with
farming. Ours was a family operation,
not at all different from any other small business. And as such, we had
to balance work on the farm with the complicated bookkeeping that goes
along with it.
To
make life easier for American families and businesses, the Ways and
Means Committee has embarked on an effort to accomplish comprehensive
tax reform for the first time since
1986. The guiding principles of tax reform will be beneficial to the ag
community. We plan to lower tax rates for families and businesses,
simplify a complex and burdensome code for filers, and encourage
investment. We believe that these principles will unburden
American taxpayers and spur economic growth.
Of
particular interest to the ag community is our effort to lower tax
rates for individuals, pass through businesses, and corporations. For
individuals, this means moving from
our current system of seven marginal tax brackets down to three, with
rates of 12%, 25%, and 33%. For pass-through businesses, the rate will
be 25%. And for corporations, the rate will be 20%. In addition, our
plan will reduce complexity by repealing the Alternative
Minimum Tax. The result here will be a significant rate cut across the
board, a lower tax burden for farmers and ranchers, and simplification
when filing.
The
plan also provides businesses the ability to immediately expense their
investments. For the ag community, this means that purchases related to
the business, such as tractors,
combines and other farm equipment will be written off in real time for
tax purposes, as we move toward a cash-flow tax. This means that we are
doing away with complicated depreciation schedules and uncertainty
regarding extension of temporary tax provisions. Additionally,
this will make sense for family farmers, who already operate on a
cash-flow basis by using the cash accounting system. We believe that the
move toward immediate and full expensing would open greater
opportunities for the cash method of accounting.
