Before heading into an election summer, Senate is set to vote on legislation that helps end escalating European taxes against U.S. farm products and approves several other key agricultural tax provisions. Senate Finance Committee Chairman Chuck Grassley and Ranking Member Baucus report that the Senate plans to complete Senate action on the Jumpstart Our Business Strength (JOBS) Act (S. 1637), this week.
As a result of a World Trade Organization ruling that the U.S. Extraterritorial Income Exclusion (ETI) program was a prohibited export subsidy, the EU has implemented a 5% tax on more than $4 billion worth of U.S. exports. The 5% tax will increase one percent each month until it reaches 17% in March 2005. The JOBS Act would repeal ETI and replace it with a series of tax cuts for domestic industries.
"We have a finite list of amendments, and we intend to work through amendments Monday, Tuesday, and until the bill is done," the senators said in a joint statement. "Both of us share the goal of creating more good-paying jobs in our home states and throughout the country, and that's exactly what the JOBS bill will do.
According to American Farm Bureau Federation President Bob Stallman, swift passage of the bill is needed because it includes energy tax incentives for homegrown, renewable fuels such as ethanol and biodiesel. Those incentives would support U.S. farmers while increasing the production of environmentally friendly, domestic energy supplies, Stallman says.
The measure also contains other important agricultural tax provisions, including an extension of the increased limit for farm business expense deductions. Under that provision, farmers, ranchers and woodlot owners would pay fewer taxes due to expansion of small business expensing provisions and changes in the way timber sales are taxed.
"Every month that we delay enacting this bill sees another ratcheting up of European Union tariffs on American products, harming American business," the senators statement says.