NFU: Current tax reform plan disadvantages family farmers, ranchers
WASHINGTON – As the U.S. Senate readies to vote on a major overhaul of the nation’s tax system, National Farmers Union (NFU) is urging lawmakers to vote against the current plan because it benefits the nation’s largest corporations and wealthiest citizens at the expense of family farmers, ranchers, and the middle class.
The family farm organization sent a letter to members of the Senate today, highlighting the detrimental impacts of the legislation. NFU is concerned with the massive, $1.4 trillion increase to the federal deficit, potential elimination of farm safety net funding, worsened quality and affordability of health care for rural Americans, and several provisions important to running a family farm operation.
“This tax plan is fiscally irresponsible and regressive in nature, and it has very negative implications for our nation’s farm and ranch families,” said NFU President Roger Johnson. “While we support efforts to simplify the tax code, we cannot support this flawed legislation that robs family farmers, our future generations, and our nation’s lower and middle classes to pay for tax cuts to the wealthiest individuals and corporate interests. That is exactly what this legislation does, and we are strongly urging the Senate to vote against it.”
Chief among NFU’s concerns is the impact of the $1.44 trillion that will be added to the federal debt if the current proposal is passed. “NFU’s grassroots-passed policy expresses deep concern over our nation’s fiscal well-being,” wrote Johnson. “Past efforts at tax reform have at least begun with the goal of being deficit neutral. We believe it is a grave mistake to abandon such an important goal.”
If passed, this $1.44 trillion increase to the deficit would jeopardize family farmers’ and ranchers’ safety net, as it could force the Office of Management and Budget (OMB) to sequester many farm program payments by 100 percent. Earlier this month, the nonpartisan Congressional Budget Office (CBO) confirmed the OMB would be required by law to sequester $136 billion in fiscal year 2018 and similar funds each successive year.
“Given the limited number of non-exempt mandatory accounts that can be sequestered, non-exempt programs would need to be sequestered at 100 percent,” explained Johnson. “That sequestration would eliminate important aspects of the farm safety net, including the Agricultural Risk Coverage and Price Loss Coverage programs. Such a scenario would be devastating to family farmers.”
Johnson also highlighted the impact that the current plan would have on our nation’s healthcare system. CBO projects that the number of people with health coverage would drop by 13 million by 2027.
“Repeal of the individual mandate is particularly troublesome for farmers and ranchers, who are older and more likely to have preexisting conditions than the average person,” said Johnson. “Those that cannot risk going uncovered will face premium costs that are 10 percent higher than current baseline projections. Repealing the mandate will make it even more difficult for the congress to stabilize healthcare costs for all Americans.”
Finally, Johnson cited a number of troublesome changes to provisions that farmers rely on in the current tax code. These include: limiting “carryback” net operating loss provisions that help farmers during tough times; repealing the Domestic Production Activities Deduction (Sec. 199), which has allowed cooperatives to pass an estimated $2 billion directly back to their owners; and changes to expensing provisions.