WASHINGTON, D.C. – The Senate Sunday passed the Inflation Reduction Act, but not before adopting an amendment that could jeopardize extension of a key tax break for family farms, according to some politicians.
What the Inflation Reduction Act passed by the Senate over the weekend does include is $40 billion of agricultural-focused funding. Passed along party lines, the legislation seeks to address prescription drug prices, climate, and reducing the federal deficit. The bill includes $4 billion for drought resilience directed to the Bureau of Reclamation, and $3.1 billion in funding for distressed borrowers of USDA loans. The legislation also includes funding for USDA conservation programs and rural development.
Whether being used as a partisan political decoy or not by some Republican Senators, the amendment by Virginia Democrat Mark Warner killed a further cap on a sales tax break that helps wealthier urban areas and replaced it with one used to pay for small ‘pass through’ businesses, including most family farms that file as individuals and have positive taxable income to qualify for pass through deductions.
“My amendment would simply strike the offset in the previous amendment, known as the State and Local Tax Deduction, and replace it with a two-year extension of a so-called, Loss Limitation Policy, that has bipartisan support over many years, 52 billion dollars that more than offsets the 35 billion dollars that were taken from the previous amendment.”
The Senate with the vice-president breaking a tie, adopted Warner’s amendment, upending one by South Dakota’s John Thune that passed on a bipartisan vote.
Thune argued Warner was taking away the ‘pay-for’ needed to extend the tax break for ‘pass-through’ businesses when it expires in 2026.
“That very offset is how we’re going to pay for extending the 199a deduction for ‘pass-through’ businesses in this country. So, if you want to rob it and use it here, it’s not going to be available when it comes time to help out those small businesses…all of whom you represent, as ‘pass-through’ businesses across this country.”
Thune also originally tried to cushion the impact of the minimum tax on big corporations, arguing it could be extended to smaller partnerships if their unrelated firms had total income hitting a billion-dollar threshold.