WASHINGTON – Congressman Ralph Abraham, M.D., R-Alto, introduced legislation Thursday, Feb. 4, to advance sensible tax reform in an effort to stimulate agribusiness.
Dr. Abraham’s bill, the Fairness for Agricultural Machinery and Equipment (FAME) Act, will fix the tax code to shorten the depreciation schedule for farm equipment from seven years to five years. The change will bring the code more in line with the equipment’s useful economic life.
A shorter depreciation schedule means that farmers can deduct the costs of new investments in farm equipment from their taxable income over a shorter period of time. This will allow farmers to recover the cost of equipment sooner and, therefore, encourage farmers to make investments to grow their business and spur growth in farm equipment manufacturing.
“The FAME Act is common sense legislation that will put farmers on equal footing with other businesses that typically have a five-year depreciation schedule for their durable equipment. This is a good bill that will strengthen agribusiness and encourage economic growth,” said Dr. Abraham, a member of the House Agriculture Committee.
Dr. Abraham introduced the bipartisan FAME Act along with eight other members of Congress from across the country. They include Reps. Rick Crawford, R-Ark.; Jeff Denham, R-Calif., Ron Kind, D-Wis.; Sanford Bishop, D-Ga.; Frank Lucas, R-Okla.; Brad Ashford, D-Neb.; Mike Pompeo, R-Kan.; and Rod Blum, R-Iowa.