Op-Ed: Tax Extenders are Critical to Stable Rural Growth
As we approach the end of the year, minds turn toward family, Christmas, big dinners, and snow. But for many in rural America, it’s also time to wrap up the tax year and set the strategy for the year ahead. For cattle producers and farmers equipment purchases, new buildings, and other major capital expenses are logical considerations. Unfortunately, for many the tax code has looked more like a gamble than a sure bet. Key provisions like Section 179 deductions and bonus depreciation that had been extended in 2014, again have been pushed to the end of the year. Earlier this year, the House permanently extended both Section 179 and bonus depreciation, but the Senate has yet to act. Without action, Section 179 dropped back down from $500,000 to $25,000 and bonus depreciation completely disappeared for the current tax year.
If Congress fails to act in December, producers will not be able to take these provisions into account during this tax year. Congress can retroactively extend these provisions, but in the real world, we cannot retroactively make plans or purchases. These provisions are key considerations when making the decision to purchase machinery and equipment. Those capital expenditures provide the pass through growth for much of the rural economy that relies on agriculture. That is why it is so important for Congress to act to pass a multi-year extension of Section 179 and bonus depreciation in early December. Producers need access to these tools while they still may be of use this tax year, and the certainty in future years to plan without waiting until the last minute to make major financial decisions.
We understand all too well the cyclical nature of the markets and weather we live with every day. These forces are beyond our means to control. But the tax code should not be as unpredictable as the weather or the markets. There is bi-partisan support for these provisions, and these provisions provide inducements for small businesses nationwide to grow and expand. In turn, that increases economic growth in areas where it is needed most. I encourage you to join with the members of the National Cattlemen’s Beef Association in talking with your members of Congress and ask them to pass a multi-year tax extender package.
By: Philip Ellis, NCBA President