Opportunity for Tax Reform

U.S. tax code must be updated to help agriculture and other Americans

Published online: Jul 31, 2017 Articles John Keeling, Executive VP and CEO, National Potato Council
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This article appears in the August 2017 issue of Potato Grower.

While the chaos in Washington, D.C., is beamed to us like a non-stop reality television show, the substantive work of government goes on and demands for policy reforms grow louder. One of the major priorities for many industries, including agriculture, is improving our outdated tax code.

As the global economy continues to integrate, it is essential that U.S. policies keep pace. Unfortunately, our tax code has not met that ideal. While our tax code has sat idle, our global competitors have been the beneficiaries of tax reforms and other agriculture support mechanisms that skew the playing field in their favor. American farmers cannot continue to compete with one hand tied behind their backs.

To address such issues, last year the chairman of the House Ways and Means Committee, Texas’s Kevin Brady, unveiled a “Better Way for Tax Reform” to build a tax code for growth. Though the proposal languished during last year’s election, the Ways and Means Committee has recently resurrected it and held hearings to explore some of its reform proposals. Whether an individual component of Brady’s proposal will ever become law remains to be seen. The hope is that the chairman’s effort to focus attention on tax reform pushes Congress and the Trump administration to act.

As the House begins its work, the National Potato Council (NPC) is part of a large agriculture coalition focused on including grower priorities including estate tax repeal, stepped-up basis, accelerated depreciation, access to cash accounting, maintaining business interest deductions, and preserving capital gains rate reductions in any tax reform package. The NPC is also carefully monitoring plans to create a so-called “border adjustability” tax. Taxes applied to imports, if not constructed correctly, could violate international trade rules. Retaliation by our trading partners could be devastating for the U. S. potato industry, which exports 20 percent of the potatoes we produce.

The opportunity for tax reform is real, and so is the need. Yet neither of those circumstances will be enough to make it a reality. Without a bipartisan agreement in Congress, the truly significant tax reforms we require won’t be possible. The administration plays a major role in creating the environment for that bipartisanship. Continued inflammatory headlines, whether self-inflicted or generated by the opposition, will cloud that environment and lower the probability for success.

The NPC is working with others in the agriculture industry to push the issue forward. All Americans, including potato growers, will benefit if Congress and the administration can take credit for making substantive tax reform a reality.