As Congress heads into its lame-duck session following the 2024 election, issues of crucial importance to farmers remain unresolved.

“Of course the farm bill is one of these,” said Andy Tauer, Indiana Farm Bureau’s executive director of public policy. But Farm Bureau is also lobbying for Congress to:

• Pass a federal budget that would replace the continuing resolution that expires Dec. 20.
• Reauthorize the expiring portions of the 2017 Tax Cuts and Jobs Act that are important to agriculture.

The 2017 Tax Cuts and Jobs Act (TCJA) benefitted most farm and ranch businesses and has allowed them to build their operations and stimulate the agricultural economy, according to the American Farm Bureau Federation. Among its important provisions are reduced tax rates, a new business income deduction, provisions to allow the matching of income and expenses, immediate cost recovery and an increase in the estate tax exemption.

The U.S. Department of Agriculture Economic Research Service estimates that the expiration of the temporary provisions of the TCJA, as well as the American Rescue Plan Act “would increase farm households’ federal income tax liabilities by $8.9 billion and estate tax liabilities by $647 million in the year following expiration.”

Many of the pass-through business provisions in the TCJA are temporary and set to expire in 2025, and they therefore need to be renewed or made permanent, AFBF explained in an issue paper on agriculture and tax reform. More than 98% of farms and ranches operate as “pass-through businesses”: sole proprietorships, partnerships and Sub S corporations. Failure to extend these important provisions will result in a tax increase for farmers and ranchers and leave them without ways to deal with the cyclical and unpredictable nature of their businesses.

Also expiring in 2025 is the increased estate tax exemption which under the TCJA doubled to $11 million per person or $22 million per couple.

Almost all farmers have benefited greatly from congressional action that increased the estate tax exemption, provided portability between spouses and continued the stepped-up basis, AFBF said. This allowed farmers to make improvements and updates instead of being burdened with the cost of life insurance and estate planning.

“Even more important,” said Brantley Seifers, INFB national affairs director, “the increased exemption makes it possible for more families to continue farming when a family member dies without having to sell land, livestock or equipment to pay the tax.”