What's the Background?
In any comprehensive tax reform package, the following issues are ordered priorities for NPPC and its members and should be included in any tax reform package:
- Cash Accounting: Cash accounting is the primary and preferred method of accounting for pork producers. It improves cash flow by recognizing income when it is received and recording expenses when they are paid, giving needed flexibility to plan for major investments in the businesses and, in many cases, provides guaranteed availability of some agricultural inputs.
- Estate Tax and Stepped-Up Basis: Elimination of the estate tax will allow family farms and businesses to transition smoothly to the next generation. Maintaining stepped-up basis is vital in an asset-heavy industry such as agriculture. Its repeal would create a larger and more complicated tax code.
- Capital Investments: An immediate deduction for the full cost of assets would encourage new investment. Elimination of the interest and depreciation deductions on prior investments should be phased in to allow farmers and producers to adjust their investment plans to reflect new requirements.
- Corporate Tax Rate: To remain globally competitive, the U.S. tax code should reduce the corporate tax rate and reduce the tax on business income earned through sole proprietorships and pass-through entities.
- Simplification: Farmers and producers currently must navigate a complex tax code and often must expend more resources to hire accountants and lawyers to comply. Simplifying the tax code will reduce costs associated with compliance.
Why Does It Matter To Our Producers?
Sustained growth in the pork industry relies on continued investment and expansion. The current tax code is complex, inefficient and requires extensive use of professional accountants to ensure compliance. It penalizes farmers and producers who have achieved success and discourages the continuance of family farms, investment and entrepreneurship.
What is NPPC's position?
NPPC supports tax reform to streamline business operations, encourage investments and make the American pork industry more competitive worldwide. NPPC and its members encourage maintaining the option for a cash accounting system, eliminating the estate tax, maintaining stepped-up basis, lowering taxes on capital investments and immediate expensing of capital investments, simplifying the tax code to reduce compliance costs and lowering the corporate tax rate.