December 20, 2017
Alabama farmers, families and businesses will benefit from the Tax Cuts & Jobs Act passed by Congress today, according to Alabama Farmers Federation President Jimmy Parnell.
“We congratulate members of the Senate and House of Representatives for working with President Trump’s administration to pass meaningful tax relief,” Parnell said. “This plan is a step toward simplifying our tax system and allowing individuals, families and businesses to keep more of their hard-earned money.”
The Senate gave approval to the measure by a 51-48 vote. Alabama Republican Sens. Richard Shelby and Luther Strange voted in favor of the plan. The House of Representatives passed the tax plan Tuesday but had to vote again today due to a procedural challenge by Senate Democrats. The final House vote was 224-201. Alabama Republican Reps. Bradley Byrne, Martha Roby, Mike Rogers, Robert Aderholt, and Gary Palmer voted “yes,” while Alabama Democratic Rep. Terri Sewell voted “no.” Rep. Mo Brooks, R-Ala., who is recovering from prostate cancer surgery, was not present for today’s vote but voted in favor of the bill yesterday.
President Donald J. Trump is expected to sign the bill before Christmas.
“While no tax legislation is perfect, this plan encourages investment and job creation,” Parnell said. “We have seen tremendous economic growth in our country, and these changes to the tax code will help America stay on a positive course.”
For farmers, the plan provides a 20 percent tax deduction for small businesses often taxed at individual rates under a “pass-through” provision. This change effectively caps their tax rate at 29.6 percent. This provision applies to 94 percent of farmers.
The plan also allows farms and businesses to immediately write off the full cost of new equipment; doubles the estate tax exemption; increases small business expensing limits under Section 179; and preserves deductions for customary business expenses including feed, seed and other inputs.
For families and individuals, tax relief comes in the form of lower tax rates; almost doubling of the standard deduction; expansion of the Child Tax Credit; and preservation of popular deductions including charitable contributions, mortgage interest and state and local taxes.
The plan also eliminates the individual mandate penalty tax of the Affordable Care Act and allows families to use 529 savings plans for elementary, secondary and higher education.
Click here for highlights of the Tax Cuts & Jobs Act from the House and Senate Conference Committee.