President Trump has been working to boost the U.S. economy and bring jobs back to this country since his election in November 2016. Since taking office, he has attempted to fund federal tax reform with dollars freed up from the repeal of Obamacare and with taxes on imported business inputs.
Neither of these efforts has been successful, which means the White House and Republican leaders have a tremendous challenge to overcome if they want to reform the taxes we pay as individuals and business owners. The dollars my family are able to keep in our business are dollars we will invest in ranching and in the businesses that support our ranch.
My family ranches south of San Angelo. My son is working there now, learning how to run things and be a part of continuing our family business. Meanwhile, I spend days in my law office in San Antonio and in San Angelo working on behalf of my family and on behalf of ranching clients who, just like us, are trying to keep a family business going.
Republicans want to simplify individual tax rates. Right now, we have seven tax brackets that range from 10 percent to 39.6 percent. House GOP tax authors recommend four tax brackets – 12, 25, 35 and 39.6 percent. They also substantially increase the standard deduction for married couples filing jointly to $24,000, up from $12,000. They recommend the same treatment for individual filers, increasing the standard deduction to $12,000, up from $6,000.
Most itemized deductions are eliminated under the House proposal. From what I have read and learned, their thinking is that most deductions we have today will be unnecessary because the tax rates will be going down and we simply won’t need them. However, the authors retain the deductions for home mortgage interest, state and local property taxes and charitable giving.
Texas and Southwestern Cattle Raisers Association has worked for decades to get the onerous death tax repealed. Under this framework, after five years, the death tax will be fully and permanently repealed. In the meantime, tax-exemption rates are immediately doubled for individuals and couples, and are indexed for inflation.
An important reform for small-business entities like partnerships, sole proprietorships, LLCs and subchapter S corporations is that income taxes from those business entities, on an individual return, are capped at 25 percent. There is also a provision that, for at least a five-year period, any capital investments made after Sept. 27, 2017, can be immediately expensed. This is a good reform for business.
This is a great time to get involved. Contact your lawmakers and let them know how you feel about federal tax reform. Your voice, as the business owner who will be paying taxes and trying to keep your family ranch going, is the important voice they need to hear.