Cape News

America's family farmers face potential financial challenges if Congress does not extend the 2017 Trump tax cuts. The expiration of these tax cuts would result in a significant reduction in the Death Tax exemption for two million family-owned farms, potentially subjecting them to a 40 percent tax rate.

Jason Smith, Chairman of the Ways and Means Committee, expressed concerns about the impact on family farmers. He stated, "Farming is inherently fraught with uncertainty which is why it makes zero sense for Congress to compound that challenge by leaving America’s family farmers and ranchers in limbo about whether they are due for a massive tax increase."

The 2017 tax cuts doubled the Death Tax exemption and indexed it for inflation, shielding more family businesses from its high rates. With 96 percent of U.S. farms being family-owned and 88 percent classified as small family farms, the implications are broad-reaching.

Congress has limited time to act, with only 149 legislative days available next year before these tax cuts expire. Failure to extend them could result in various financial burdens: a 22 percent average taxpayer hike, a $1,695 increase for median-income families of four, halved Child Tax Credits for 40 million families, reduced guaranteed deductions affecting 91 percent of taxpayers, increased top tax rates on small businesses if Section 199A expires, impacts on seven million taxpayers from the Alternative Minimum Tax return, and halved Death Tax Exemptions for two million family farms.

Smith highlighted that without legislative action, farmers may need legal and accounting assistance to navigate these potential changes and decide on their business's future viability.