October 6, 2017
The equine industry and its partners in the agriculture and small business sectors continue to engage Congress and the Administration on key elements of the GOP’s “unified framework for tax reform,” released on September 27. While the framework outlines broad themes for reform, AHC and its partners are focusing efforts on repeal of the estate tax, also known as the “death tax,” as a pillar for a 21st century tax code. Below are summaries of tactics used to move the legislative process forward, and highlights from conversations with congressional and administration officials.
Congress Hears from Small Business, Agriculture:
On September 12 – two weeks prior to release of the GOP framework – AHC joined nearly 150 small business groups in a coalition letter to congressional leadership urging full repeal of the estate tax. When the government imposes estate taxes on an equine operation, surviving family partners may be forced to sell equipment and other assets to save the family business. Signatories represent a cross-section of American business, including builders and contractors, grocers, truckers and cattlemen. Advocates emphasized the fact that repeal of the estate tax would not only cost the treasury relatively little revenue in the short term, but ultimately increase tax revenues by $145 billion over a ten year period. Underscoring minimal, short-term impacts on the federal budget is crucial to moving tax reform through the budget reconciliation process, which requires Congress to demonstrate that the new and improved tax code will ultimately achieve deficit reduction.
“Budget Reconciliation,” a Procedural High Jump:
Before moving forward with a tax reform bill, Congress must first pass a federal budget for FY2018 which includes instructions for tax legislation. The process, known as “budget reconciliation,” allows the Senate to pass a bill with 51 votes, therefore bypassing the 60 vote threshold necessary to avoid the filibuster that applies to most legislation. This parliamentary tactic is crucial for tax reform legislation, where Republicans must receive the support of the vast majority of their Senate members to pass a bill. On October 4, AHC joined more than 40 agriculture groups – including the American Farm Bureau Federation and American Veterinary Medical Association – in a letter to Congress expressing support for passage of a budget resolution with reconciliation instructions for tax reform. On October 5, the House of Representatives passed its $1.132 trillion budget, which it claims will achieve $6.5 trillion in deficit reduction over ten years.
Attention now turns to the Senate, which is expected to consider a $1.5 trillion budget during the next four weeks. To make sure lawmakers remain focused on the tax reform process, please call your senators today and tell them “to pass a budget today that paves the way for tax reform.” You can contact your senators’ Washington offices by calling the Capitol switchboard at 202-225-3121.
Status of the Debate:
AHC and its partners have met this week with congressional leadership offices and White House staff, who remain optimistic that substantial progress toward tax reform will take place during the weeks ahead. Policy makers have also made it clear that to push tax reform across the finish line, the legislation must include major provisions that bolster the middle class. To that end, officials have underscored the importance of mortgage interest and charitable giving deductibility, the prospect of lower rates through consolidated deductions, and the overall simplicity of a streamlined code. The House Ways and Means Committee has created a template “postcard” to illustrate the taxpayer-friendly approach favored by proponents of reform. To view a copy of the proposed, streamlined tax form, click on the following link: https://waysandmeans.house.gov/tax-form-simple-fit-postcard/.
Horsemen and horsewomen can deliver a timely message by contacting their elected officials and expressing the need to modernize the code in general, and specifically to repeal the outdated death tax. Other issues that will emerge as the debate moves forward will include deductibility of business interest, expensing of depreciable assets, and establishing a top rate of 25% for sole proprietorships, Subchapter S-Corporations, and other small business entities. If you would like more information related to tax reform, please contact Bryan Brendle at email@example.com.