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.
(Link to video: https://www.youtube.com/watch?v=eiEbH9x7Czk&feature=youtu.be)
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.
I want to thank you again for allowing me to testify. I look forward to working with this committee to ensure that the interests of rural America are protected as we move forward with comprehensive tax reform.
(Release courtesy of Rep. Lynn Jenkins)