Source: POLITICO MORNING AG, 11/1/17

As a storm of news swirls around Washington, House Republicans have delayed by a day their plans to unveil their tax reform proposal. The GOP hopes to release the bill Thursday, but leaders and tax writers privately acknowledge they have a number of disagreements to resolve, reports POLITICO’s Tax team. There are plenty of issues being watched by the agriculture industry including:

— Interest deductions: House Republicans in its tax reform framework proposed eliminating the business interest deduction, a move the agricultural industry opposes. Farmers and ranchers are heavily debt financed and have high interest expenses on equipment and land, so losing the deduction would make it more difficult to cash flow, groups like the American Farm Bureau Federation have said. Young producers just getting started would be particularly harmed, according to industry groups.

— Estate taxes: Farmers recently expressed some early hope that the estate tax would be repealed. That tax involves imposing a 40 percent levy on individuals with estates worth more than $5.49 million (double that for married couples) when heirs receive the estates upon death. USDA has estimated that less than 1 percent of farms pay this so-called death tax, but others contend that farmers spend a lot of time and money structuring their businesses to avoid that tax. But not so fast: On Monday, Sen. Susan Collins (R-Maine), a key GOP moderate, broke with her party and said she saw no need to eliminate the estate tax. She was open to raising estate tax exemptions, however.

— Co-op tax deductions: Congressional Republicans have said they want to eliminate the Section 199 deduction as part of the tax code overhaul. The deduction is a 9 percent tax break for most manufacturers. Last week, Pro’s Catherine Boudreau reported that the National Council of Farmer Cooperatives said the deduction benefits big and small agricultural co-ops alike. The majority of co-ops have been passing on the benefits directly to their farmer members, returning an estimated $2 billion annually to communities across the country, according to the industry trade group.

— Equipment expensing: House Republicans have been pushing for so-called expensing, which would give businesses new write-offs for purchasing things like machines and equipment. But it is an expensive break and it is unclear whether there is universal agreement on doing so.