Does your Thanksgiving Day menu include a turkey, yams and those fancy stuffed potatoes that grandma used to make every time the family gathered at her house?
Thanksgiving meal photo courtesy Satya Murthy via Flickr CC
Then there are two things you need to do.
First, send me your address and set another plate at the table. Then second, when Congress returns to Washington, D.C., after its holiday break, contact your Representative and Senators and urge them to finish up the tax extenders.
If the 50+ tax breaks that expired on Dec. 31, 2014, aren't reinstated, then many of the folks who helped make tomorrow's Turkey Day meal possible won't make it until next November.
Ag industry unites for extenders: That's the warning from 39 representatives of agricultural industries in a Nov. 16 letter sent to the Republican and Democratic leaders of the House and Senate, and copied to the bipartisan chairs and ranking minority members of the House Ways and Means and Senate Finance tax-writing committees.
The ag trade associations that signed the letter range from the American Farm Bureau Federation to the U.S. Sweet Potato Council to the National Potato Council. For folks with a more varied holiday menu, your meal is represented in the letter by the National Cattlemen’s Beef Association and the National Pork Producers Council.
There's even the National Cotton Council, which represents companies that made the tablecloth upon which your Thanksgiving delicacies were placed, or perhaps the stretchy pants you put on after the meal!
Many businesses, same concerns: While the letter includes a very wide range of the U.S. agriculture community, they share similar concerns when it comes to the tax extenders.
"Farmers and ranchers like myself rely on a stable and predictable tax code in order to plan purchases, make investments, and grow their businesses," said Philip Ellis, the president of the National Cattlemen’s Beef Association. "Each year producers make significant financial determinations, and Congress' failure to act on permanent tax reform has placed greater reliance on extender legislation over the past few years."
The agriculture sector is particularly concerned about the Section 179 provision. This tax law allows producers to write off a greater part of capital expenditures in the year that the equipment was purchased rather than depreciate them over time.
The letter writers say the expensing option, along with the associated bonus depreciation component, provide an incentive for farmers and ranchers to invest in their businesses and offers the benefit of reducing the record-keeping burden associated with depreciation.
Dramatic Section 179 drop: Under the expired extenders, expensing under Section 179 was set at $500,000, set in 2014. The House passed a bill in February that would permanently set the maximum Section 179 allowance at that dollar level, with a phaseout threshold at $2 million, and index both amounts for inflation starting in 2016.
But when the extenders expired at the end of 2014, that dropped the maximum amount that a small business can immediately expense under Section 179 to $25,000, adjusted for inflation, with the rest of the capital costs to be depreciated over time.
That reduced expensing limit could be disastrous for the ag industry, according to the letter writers.
"The failure to renew these expired provisions of the tax code will place additional burdens on farm and ranch families who are asset-rich and cash-poor and already face the uncertainties of weather, market prices and international competition," the letter reads.
And if enough of those food-producing businesses do suffer or go completely out of business because of, as the letter implies, more costly tax laws, you can bet that we hungry Thanksgiving celebrants won't be very thankful for the higher prices we'll face next November.
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