Living in Missouri, it’s not often that the leader of the free world comes to town. There’s nothing quite like the buzz that surrounds a Presidential visit. When President Trump landed in Springfield last Wednesday to kick off his tax reform pitch, fast food restaurant marquees welcomed him and encouraged him to “Make America Great Again,” traffic was shut down for several blocks around the event site and neighbors leaned over their fences to capture videos of the crowd.
Yet even such a rare event as this is, it is far more common than a thorough review and reform of our tax code. Springfield has been honored with 10 presidential visits in the 31 years since Ronald Reagan signed America’s last major tax code overhaul into law. Babies born 15 years after that reform are now driving. Over the past three decades the slow but steady drip of added regulations and carve-outs has made our tax code a tangled mess, to the point where strict compliance is almost impossible. It’s long past time for us to update our tax laws and bring them in line with today’s needs.
Missouri’s farmers and ranchers looking for change heard a lot of welcome news in the President’s speech. Simplifying the tax code so that it takes less of regular people’s time to prepare and file their returns, delivering middle-class tax relief and growing the American economy at a faster clip would all provide huge benefits to the average rural Missourian.
While these broad outlines are a good starting point, we all know you can’t vote on a speech. In the next few weeks, Congress must draft a bill laying out the details of what will stay, what will go and what will change. Most of us can agree that overall tax rates would need to be lowered significantly and the entire code needs to be simplified in order to spur the level of economic growth the President wants and strengthen the job market in rural America. Capital gains taxes should be lowered to encourage capital investment and give young and beginning farmers more opportunity to purchase land and a fair chance to compete in a difficult business.
More technical – but extremely important – issues like allowing interest deductibility, keeping cash accounting rules in place and retaining rules allowing stepped-up basis on death are vital to farmers and ranchers and will be closely followed as the proverbial horses are traded in Washington.
As the end of the year approaches, the pressure will build for Congress and the President to pass legislation of real substance. Tax reform is long overdue and a simplified, more competitive tax code would be a huge win for Missouri farmers and ranchers. Tax reform may not be as exciting as the President coming to town, but it could put American agriculture on a path toward several more decades of successfully feeding and clothing the world.