How the 2017 tax cuts helped two Pennsylvania farmers feed the world

The United States feeds the world. In fact, we are one of the top food exporters.

But just because there’s a huge market for food grown in the U.S. doesn’t mean it is easy to be a farmer. In places like Pennsylvania — where an unseasonably snowy winter or a hotter-than-usual summer can destroy crops and livelihoods — feeding the world is particularly difficult.

The 2017 Tax Cuts and Jobs Act made the business side of American farming easier. It allowed farmers to write off a greater share of their business expenses — the combines, plows, tractors, and irrigation systems needed to grow their crops — and lowered tax rates.

Now, that progress is at risk.

How the TCJA helped the Thiele Dairy Farm

The Thiele family has operated a dairy farm in Butler County, Pennsylvania, since 1868. William Thiele now owns the land with his twin brother, James, and his parents, Ed and Lorraine.

While having many hands can make for lighter work, keeping the farm afloat has been a constant struggle. The family has embraced innovations that helped regenerate the farm’s soil and implemented technologies that will help William, his parents, and his brother mitigate risks to their crops.

But it was President Trump’s transformational 2017 tax cuts that really helped the family invest.

The year after the 2017 tax cuts were enacted, businesses could depreciate 100% of the cost of property. That provision phased out over time, however, and by the time the Thieles built a new machinery building in 2024, the depreciation amount was down to 60%.

William is still grateful for whatever tax savings are left, but it seemed arbitrary that investing in 2018 versus 2024 would matter to the IRS.

Now, the depreciation allowance is in danger of going away altogether.

The family needs the 2017 tax cuts to be made permanent to sustain their current 300 acres, their crops, and dozens of dairy cows.

The fact is, a growing number of family farms are at risk. With rising costs and record-high inflation, operating these businesses is quickly becoming impossible for many. Without commonsense tax reform, farms like the Thieles’ that make up the backbone of American agriculture will soon become a thing of the past.

The Thieles are not the only Pennsylvania family that will face higher taxes if expiring TCJA provisions aren’t extended.

Dolan family farm: ‘Doing whatever we can to hang on to this property’

For three generations, Dan Dolan’s family has operated a farm that was originally built in Port Royal, Pennsylvania, in the early 1800s. Passed down on his mother’s side, Dan grows hay and corn.

“We’re doing whatever we can to hang on to this property,” Dan says.

“Hanging on” got somewhat easier with the TCJA. Like William and his family, with the Trump tax cuts, Dan could write off a larger share of capital investment.

That’s not all. The TCJA also:

• Reduced income taxes for all businesses no matter how they are incorporated
• Helped families pass down their farms to future generations by raising the threshold at which the punishing federal estate tax kicks in

Dolan, who also owned an auto body shop for 30 years, said the TCJA enabled him to make additional capital investments in his farm.

“If you do not have things to write off, the taxes will kill you at the end of the year,” Dan says. “These tax cuts that are going to expire, we need to try to keep them going forward. Without them, small businesses and farmers will suffer.”

Prices could rise if 2017 tax cuts expire

If you think rising taxes won’t affect you because you don’t run a farm, think again.

Taxes are a business expense. When they go up, manufacturers and farmers are forced to raise prices. That means:

• If you buy fruits and vegetables at a farmers market, the price will go up
• If you buy American-made clothing, your jeans will cost more
• If you hire a local contractor to renovate your kitchen, the cost of the project will rise

Farmers feed the world, but they also must feed their families. They cannot simply absorb the cost of higher taxes on their own.

If the Trump tax cuts expire, they’ll have to pass some of the burden on to you.

Want to stop this from happening? Contact your lawmakers to let them know you support extending the Tax Cuts and Jobs Act.

American farms — and your household budget — depend on it.