Opening Statement: Chairman K. Michael Conaway: Committee on Agriculture Hearing: Agriculture and Tax Reform: Opportunities for Rural America
Remarks as prepared for delivery:
Good morning. I want to welcome you all to today’s hearing examining how the tax code impacts American agricultural producers. Much like it did in 1985 and 1986, tax reform is poised to again consume much of Washington’s attention. Before that happens, today’s hearing will offer Members a baseline understanding of how the current tax code affects farmers, ranchers, and foresters, and how changes to the code might affect them going forward.
Both the ranking member and I are CPAs, and many of our colleagues in Congress are small business owners in their own right. Each of us who has advised a client or managed a business is keenly aware of the day-in, day-out challenges of running a business, including the need to carefully manage cash to pay suppliers; the challenge of financing repairs, improvements, or expansion; and the relentless drive to build a business that can be transitioned to the next generation.
While there are several parallels between agriculture and other small businesses, few sectors are subject to as many unknowns as farming and ranching. Weather, pests, constantly changing consumer preferences, predatory trade practices of foreign governments, and so much more all rob certainty from producers. Agriculture is an industry of high fixed costs, lead times that last an entire growing season or longer, and highly variable returns combined with historically very tight margins. As a result, managing tax liability is of paramount importance.
To support producers, Congress has worked to soften the negative impacts of inflexible tax rules that do not make sense for agriculture. These changes, which often seek to align taxable events with real world activities, help producers manage their tax burden and ensure they have the means to continue farming or ranching.
As with tax reform changes from years past, the devil is in the details. While Chairman Brady and his colleagues at Ways and Means are hard at work, many of the details have yet to be ironed out. What we do know, though, is that tax reform is coming and it holds the promise of dramatically increasing economic growth for all Americans in every walk of life.
Providing for a simpler, fairer tax code means that many parts of the tax code may have to change. While every individual component of tax reform will have its supporters and detractors, these individual proposals cannot be evaluated in a vacuum. I’d ask my colleagues to listen, ask questions, and learn today, but reserve judgement on the components of tax reform until we can see the entire package.
I’d like to again welcome our witnesses and thank them for taking the time to be with us here today.
With that, I now turn to the Ranking Member, Mr. Peterson, for any comments he’d like to make.