Fairy Street

At the end of 2025, the pro-growth, pro-worker, and pro-family tax measures of the Tax Cuts and Jobs Act (TCJA) will expire. These provisions include nearly doubling the standard exemption for Iowa families, tax cuts for small businesses, investment incentives for our farmers, manufacturers, and job creators, and other tax items.

To ensure our tax code remains competitive and our economy grows, House Budget Committee Chairman Jason Smith (R-MO) has announced the creation of ten “tax teams” tasked with gathering the best ideas and proposals to not only improve the TCJA’s strong policies, but also to identify areas of the tax code that need attention and can be improved. As a member of the Budget Committee, I was selected to serve on the Global Competitiveness Tax Team, the Supply Chains Tax Team, and the Rural America Tax Team—all of which impact our families, farmers, businesses, and the economy in rural Iowa.

As part of our work, the Rural America Tax Team – of which I am the vice chair – recently held a day-long tour of Iowa and Nebraska on Thursday, August 15, to speak with farmers, business owners and other stakeholders. Our trips took us to Omaha, Council Bluffs and Atlantic to have one-on-one conversations with people, organizations and local businesses that have benefited from the TCJA and hear their suggestions on how we can continue to improve our tax code.

At our first stop, we met employees and representatives of Ag Processing Inc., an agricultural cooperative in Omaha.

In Iowa alone, there are 60 agricultural cooperatives that support our producers and play an essential role in our agricultural economy. The 20 percent qualified business income tax credit created under the TCJA has helped strengthen cooperatives – and all of our small businesses on Main Street – and enable them to better serve their customers. However, that 20 percent credit expires at the end of 2025, which would significantly increase the tax burden on our local cooperatives and small businesses.

That’s why I helped introduce legislation that would allow our small businesses and cooperatives to continue to benefit from the 20 percent qualified business income tax credit even after the 2025 deadline. This tax break allows business owners to invest in their employees and cooperatives to support agricultural production in Iowa. There is no question that this provision should be extended.

While in Omaha, we also visited CLAAS – a manufacturer of agricultural equipment and machinery. During our panel discussion, CLAAS employees and representatives emphasized the importance of manufacturers and companies being able to immediately deduct research and development costs. This rule – which was first introduced in 1954 but expired at the end of 2022 – allows companies, industry and agriculture to immediately deduct costly but important investments in research and development that stimulate innovation, reduce input costs and increase productivity.

A permanent 100 percent R&D deduction would also help us compete with China, which allows its manufacturers and companies a 175 percent R&D deduction. In the interest of our economic growth and competitiveness, any change in tax law must include a permanent R&D deduction for American manufacturers and companies.

Our third stop took us to Graceview Courtyard – a senior living community – in Council Bluffs. During our visit, we had a great conversation about the Low Income Housing Tax Credit (LIHTC) and its many success stories. At a time when our families and communities are facing high interest rates, it is important that we take action to create more affordable housing, not just in rural Iowa, but across the country.

Senior living communities like Graceview have used the LIHTC to help more seniors find safe, affordable homes. I have also worked with my colleagues to expand and strengthen the LIHTC so we can increase housing stock, lower rents, and support our families.

We concluded our day by visiting Elite Octane – an ethanol plant – in Atlantic. American-made ethanol lowers prices at the pump, supports our farmers, helps stabilize corn prices, and strengthens America’s energy security. In addition to making E-15 permanently available year-round at gas stations across the country, we must also work through tax legislation to encourage domestic energy production and end our dependence on foreign oil and gas. As the representative of the largest biofuel producing county in the country, I will always advocate for policies that support American energy production and keep our biofuel industry strong.

With the expiration of the TCJA imminent, Republicans will continue their work to extend the best provisions of this historic law, improve existing policies, and even include new ideas that spur innovation and economic growth. As a member of the House Budget Committee, I remain committed to creating a strong, competitive, and resilient tax code that benefits our families, farmers, and businesses in rural Iowa.

——

Randy Feenstra, a Republican from Hull, represents Iowa’s fourth district in the U.S. House of Representatives.