This year’s presidential candidates don’t agree about much, and tax policy is no exception. Democratic Party candidate Hillary Clinton and Republican Party candidate Donald Trump have spelled out bits and pieces of their visions for estate transfers and other issues that could affect farmers.
Regardless of who wins, an even bigger determining factor will be which policies Congress agrees with.
“This is really highly dependent on the outcome of the congressional elections,” explains Eric Toder, a fellow at the Urban Institute and co-director of the Urban-Brookings Tax Policy Center. “Presidents often get big parts of their tax agenda passed in their first year in office. [President] Obama got a lot of his proposals passed in 2009, but he had a Democratic Congress.”
Either candidate’s policies likely will add further complexity to the tax code, says principal Doug Mitchell of consulting firm K·Coe Isom. For example, Clinton has proposed an extension of the short-term capital gains rate on farmland sales that would prolong a higher tax rate over a six-year phase out, while Trump has suggested eliminating the estate tax entirely.
“It’s just a really strange year with the potential new rules that may significantly reduce discounting coupled with each candidate’s proposed tax policies and a U.S. Supreme Court seat needing to be filled. There is a lot hanging on this election cycle when it comes to how tax policy may be shaped over the coming years,” Mitchell says.