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Honored Advisor

still screwing with marketing and sound planning

No Agreement on Tax Extenders

 

 

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- Sen. Charles Grassley says it's bad for the economy if more than 50 tax breaks for businesses are not reauthorized by the end of the year, but the White House might actively oppose a bill unless certain provisions are added for middle-class families.

White House spokesman Josh Earnest on Monday said in his daily briefing that the White House would "strongly oppose" a tax package for corporations, but not specific tax breaks for businesses. The White House wants extended tax relief for college tuition. "Certainly the administration would not be supportive of a package that provides relief to corporations without providing relief to middle-class families," Earnest said.

Sen. Charles Grassley, R-Iowa, told reporters on Tuesday that leaders from the House Ways & Means Committee and the Senate Finance Committee are working on an agreement that would potentially send identical tax-extender bills to the floor in both chambers. Grassley thinks the tax package would be retroactive for all of 2014 and cover 2015 as well to avoid this same debate a year from now.

"I think if they reach an agreement, it's going to be for 2014 and 2015," Grassley said. "If they only reach an agreement for 2014, it's bad for the economy."

Grassley noted the lack of certainty for 2014 has been bad for both the wind and biodiesel industries that have awaited renewal of their tax credits. He also said the lack of better business deductions has hurt manufacturers such as John Deere Co.

The senator noted that the longer it takes Congress to approve a package, the more stress there will be on the IRS to update computers, manuals and staff to implement those provisions. Tax season likely will start late if Congress gets a tax package done.

"The fact that we put this off until December is going to delay people filing," Grassley said. He added, "Will it get done? I sure hope so, and I'm going to push that it gets done."

Grassley thinks the tax-extender bill could prompt Congress to be in after mid-December despite a push to adjourn by Dec. 11. "It brings it up really to the edge where hopefully things happen. If it doesn't happen, it's going to be bad for the economy."

A key for farmers is the Section 179 deduction on business equipment. A $500,000 deduction expired at the end of last year and was lowered to $25,000 for 2014. Farm groups and others want Congress to reinstate the $500,000 deduction as well as reinstate 50% bonus depreciation for other business machinery.

DTN's 360 poll this week asks how important it is for Congress to increase limits on Section 179 deductions to $500,000 from the current $25,000. Of nearly 300 respondents thus far, 53% said it was "extremely important" that Congress act and another 27% said it is "significant" to their operations that Congress increase the Section 179 limits.

A Senate bill being used as a blue print for tax extensions also would reinstate the $1.01-per-gallon cellulosic biofuels producer tax credit through 2015. It also would extend the $1-a-gallon biodiesel tax credit as well as the 10-cent-a-gallon agri-biodiesel producer tax credit.

Congress is out of session this week, but will return to D.C. early next week to continue the lame-duck session

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56 Replies
Senior Advisor

Re: still screwing with marketing and sound planning

Can livestock be used with the section 179?

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Senior Advisor

Re: still screwing with marketing and sound planning

Disreguard my above question, it appears as it does qualify/

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Veteran Advisor

Re: still screwing with marketing and sound planning

Only if they have a steering wheel....tires
And an engine......

Be creative when you modify them!
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Senior Advisor

Re: still screwing with marketing and sound planning

Fuzzy balls and horns?

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Honored Advisor

Re: still screwing with marketing and sound planning

Is there any wonder why people are frustrated with Congress? 

Senior Advisor

Re: still screwing with marketing and sound planning

rt1 -The way I see it is - If it takes them that long to figure out they have to go to the bathroom - then its no wonder congress is so FOS !  Smiley Surprised

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Senior Contributor

Re: still screwing with marketing and sound planning

Still toying with the notion that the tax code is the problem. What the economy needs is customers with dollars in their pockets. 

 

How do we ever expect a balanced budget if those that make money do not pay taxes. If buying equipment is such a boon to our economy, then why not deduct personal vehicles for individuals? My Gawd, think of the number of cars and trucks would be sold if Joe six pack could deduct them. The economy would be booming, Thatis if joe six pack earned enough to use the tax break.

 

Of course farmers and other businesses think the fast write off is great. Tell joe six pack that a 50% reduction in his taxes would be good for him. Of course he would vote for it while the debt continues to grow and grow and grow.

 

 

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Honored Advisor

Re: still screwing with marketing and sound planning

This is only my opinion on sec 179, but it isn`t a "tax avoidence scheme" or anything like that, it only delays taxes.   There are are few operations that it may help...those rapidly growing exponentially they can perhaps kick the "tax can" down the road `til they go broke  Smiley Happy     Or indenpendently rich opperations that have the cash in the bank to buy the "qualifying toys".

 

But if you have to borrow money to "avoid taxes" that can bite you hard down the road.   In my case, I was feeling rich and borrowed to put up a shop, to avoid taxes with borrowed money.  Well the feds allowed 179, but the state of Iowa didn`t....thank God the state of Iowa didn`t!  Because now I have 20 yrs depreciations(I think) of deductions on Iowa, that I don`t have on federal taxes. 

 

$7 corn you are "rich enough" to borrow money to delay taxes and you have to make the payments with after tax dollars and $3.50 corn.   IMO, sec 179 isn`t a hill worth "dying on".

Advisor

Re: still screwing with marketing and sound planning

Even if a farmer paid no taxes himself he is still paying indirectly through the products and services he purchases.
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