A coalition of agricultural organizations, including ASA, submitted a letter this week to the Senate Finance Committee, identifying priorities for comprehensive tax reform.

The Senate Finance Committee established working groups to review options and invited groups to submit their priorities and comments by April 15.

The ag coalition identified the following priorities: retaining cash accounting for agricultural operations; restoring Section 179 expensing limits to $500,000 and indexing for inflation; removing limitation on the amount that property values can be reduced to reflect use valuation for estate tax purposes under Section 2032A; maintaining stepped-up basis; maintaining capital gains rates at lower levels; and maintaining 1031 like-kind exchanges. Thirty six agricultural organizations signed the letter, which can be viewed here.

The prospects for comprehensive tax reform moving forward or getting enacted are low, due to the difference in tax policy priorities among Democrats and Republicans and the many different views held by individuals and interest groups who are concerned with the net impact it could have on their tax liabilities. The overarching goal of Republicans is to simplify the tax code and eliminate some tax credits in exchange for reducing overall corporate and individual rates.  Democrats want to protect and maintain tax provisions that benefit lower income individuals and increase tax revenue to invest in other priorities. While prospects for agreement on tax reform are low, the need to identify revenue to pay for legislative priorities such as a new, long-term highway infrastructure bill could provide some impetus to bipartisan negotiations on tax reform.