Cattle Raisers Applaud U.S. House Passing Tax Reform LegislationPress Release
FORT WORTH, TX — Richard Thorpe, president of the Texas and Southwestern Cattle Raisers Association (TSCRA), issued the following statement in response to the passage of the U.S. House’s extensive tax reform bill Thursday:
“We applaud today’s passage of comprehensive tax reform, which includes numerous provisions that will reduce taxes on hard-working ranching families as they work to grow and pass on their operations to future generations. It has been our longstanding goal to see the full repeal of the death tax, which places a tremendous burden on ranching families, and this legislation is a major step in doing just that.”
“We sincerely thank Chairman Kevin Brady for his leadership on this important legislation. There is still a long road ahead, especially in the Senate, where the reform package does not include repealing the death tax. I hope every cattle producer will take this opportunity to get involved and contact their Senators to voice support for the full and permanent repeal of the death tax,” Thorpe concluded.
For background on why the TSCRA is in favor of the U.S. House tax reform, we published this editorial earlier this month to provide more insight:
President Donald Trump has been working to boost the U.S. economy and bring jobs back to this country since his election in November 2016. Since taking office in January 2017, he has attempted to fund federal tax reform with dollars freed up from the repeal of Obamacare and with taxes on imported business inputs.
Neither of these efforts have been successful, which means the White House and Republican leaders have a tremendous challenge to overcome if they want to reform the taxes we pay as individuals and business owners. The dollars my family are able to keep in our business are dollars we will invest in ranching and in the businesses that support our ranch.
My family ranches south of San Angelo. My son is working there now, learning how to run things and be a part of continuing our family business. Meanwhile, I spend days in my law office in San Antonio and in San Angelo working on behalf of my family and on behalf of ranching clients who, just like us, are trying to keep a family business going.
I’ve been fortunate to serve as chair of the Property Rights and Tax Committee of Texas and Southwestern Cattle Raisers Association (TSCRA), and to continue to serve as a director. Watching what Washington does with our personal and business taxes is of great personal interest and I know any changes made by federal leaders are of great interest to my fellow cattle raisers.
So, even though President Trump has hit some snags with funding federal tax reform, he has not given up.
On Sept. 27, the White House and Republican leaders of Congress and the leaders of the House Ways and Means and Senate Finance Committees released a short, readable document called “Unified Framework for Fixing our Broken Tax Code.” I highly recommend that you download and read the document. Type the title into any internet search engine to find it. The House also recently released additional details of their plan, although those are sure to change as negotiations progress. The Senate has yet to release their version of the tax reform bill.
The builders of the framework want to simplify individual tax rates. Right now, we have seven tax brackets that range from 10 percent to 39.6 percent. The authors recommend 4 tax brackets – 12, 25, 35 and 39.6 percent. They also substantially increased the standard deduction for married couples filing jointly to $24,000, up from $12,000. They recommend the same treatment for individual filers, increasing the standard deduction to $12,000, up from $6,000.
Most itemized deductions are eliminated under the new proposal. From what I have read and learned, their thinking is that most of deductions we have today will be unnecessary because the tax rates will be going down and we simply won’t need them. However, the authors retain the deductions for home mortgage interest, state and local property taxes and charitable giving.
TSCRA has worked for decades to get the onerous death tax repealed. Under this framework, after five years, the death tax will be fully and permanently repealed. In the meantime, estate, gift and generation skipping transfer tax exemption rates are immediately doubled for individuals and couples, and are indexed for inflation.
An important reform for small business entities like partnerships, sole proprietorships, LLCs and subchapter S corporations is that income taxes from those business entities, on an individual return, are capped at 25 percent. There is also a provision, that for at least a 5-year period, any capital investments made after Sept. 27, 2017, can be immediately expensed. This is a good reform for business.
While most of the components of this tax reform framework are positive and accomplish many of TSCRA’s long-standing highest priorities, the framework is very ambiguous and 2 of the main funding mechanisms for it have been terminated–at least for the foreseeable future.
In the process of producing a tax reform bill we have to be certain that some of the most important parts of the tax code we rely on don’t get washed away. TSCRA members have given clear direction to the association leaders and staff who are working on the tax reform issue. At the Summer Meeting in June and at the Policy Conference in September, TSCRA members passed resolutions that support retaining the 1031 like kind exchange and business expense deductions. Both are retained in the first version of the House bill. TSCRA members also recommitted to the association’s policy to revise estate and gift taxes to reduce the burden on family ranches. These policies provide us with the tools TSCRA can use to advocate for tax reform on behalf of the members.
This is a great time to get involved. Contact your congressmen and let them know how you feel about federal tax reform. Your voice, as the business owner who will be paying taxes and trying to keep your family ranch going, is the important voice they need to hear.