With House Republicans expected to reveal their tax plan on Wednesday, NCBA CLUSA this week released a statement urging Congress to uphold tax policy favorable to the nation’s 40,000 cooperative businesses that support families, small businesses and farmers.
While the details of the forthcoming tax proposal are largely unknown, one provision in the recently released Unified Framework for Fixing Our Broken Tax Code indicates that the plan would increase taxes on America’s farmers, raising concerns that lawmakers may not fully understand how proposed changes could impact farm co-ops.
The document proposes eliminating the Section 199 deduction, a tax break meant to encourage domestic manufacturing that also applies to industries like agriculture and benefits farm cooperatives.
“Cooperatives are one of the most effective strategies to increase the incomes of working American families,” NCBA CLUSA President and CEO Judy Ziewacz said in the statement. “The co-op model returns the profits created by the business directly to the households that use the business. This keeps wealth in local communities instead of handing it over to Wall Street or venture capitalists.”
The National Council of Farmer Cooperatives (NCFC) has also strongly opposed the proposed elimination of the Section 199 deduction, which it says would end up taking money that is passed down by farmer co-ops to their member-owners out of the members’ pockets and out of farming communities altogether.
Ziewacz said the Section 199 deduction is critical for small businesses to thrive in an increasingly competitive market. “Now is not the time to raise taxes on the people and businesses that are the lifeblood of their local economies,” she said.