Ag Policy Blog

Guess What? We're Back Thinking About Tax Extenders

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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It looks like we're once again on tax-extender watch for items like bonus depreciation, Section 179 deductions and that whole other laundry list of tax provisions Congress always wait until the end of the year to pass.

Tax extenders were supposed to be the old way of thinking because Congress was going to shake up things in 2015. Congress was going to be different, edgy and transition beyond the election schedule. These guys were going to reform the entire darned Tax Code in 2015.

Well, maybe not so much. Congress talk about reforming the Tax Code is akin to Chevy Chase trying to use a roundabout in the movie European Vacation. It just goes round and round, doesn't it?

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Senate Majority Leader Mitch McConnell, R-Ky., declared in an interview with a group called Morning Consult he has no plans to bring comprehensive tax reform legislation to the Senate floor before President Obama leaves office in January 2017. "We're certainly not going to be able to be doing big, comprehensive tax reform with this president," McConnell said during an interview with the publication Morning Consult. "The president is not interested in revenue neutrality, and he's not interested in treating all taxpayers the same, so I don't think we'll get there on comprehensive" tax reform.

http://morningconsult.com/…

So agriculture will again be back wondering if Congress can muster the votes to extend some key tax provisions. Last year, Congress finalized the tax extenders on Dec. 17 in a one-year deal. Lawmakers essentially voted on a package of tax breaks at the end of 2014t only covered tax breaks for 2014. They did so because in their minds they were going to reform the Tax Code in 2015 so they didn't want to get carried away with any multi-year extensions.

All of the tax provisions adopted at the end of 2014 have to again be brought back up again -- sometime -- before the end of 2015 or they get lost again.

Section 179 deductions for equipment, for instance, right now stands at $25,000, instead of the $500,000 provision adopted at the end of last year -- retroactively. It's almost a fallacy to suggestion Section 179 jump-starts small business machinery purchases because nobody really knows what they are getting.

Chris Clayton can be reached at Chris.Clayton@dtn.com.

Follow me on Twitter @ChrisClaytonDTN.

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