The 2026 elections have shifted the balance of power in Washington, raising questions about what the results could mean for federal tax policy. However, Iowa farmers and ranchers may not see significant changes to the tax laws affecting their operations over the next two years.
Roger McEowen, professor of agricultural law and taxation at Washburn University School of Law, says the change in congressional leadership could spark more debate over taxes, but that doesn’t necessarily lead to new legislation.
McEowen says Democrats will have opportunities to introduce legislation, hold hearings, and oversee tax policy when they take control of Congress in January. However, President Donald Trump still holds veto authority, meaning any effort to reverse major provisions of the One Big Beautiful Bill would require his signature or enough congressional support to override a veto.
Overriding a presidential veto requires a two-thirds majority in both chambers, something McEowen says Democrats do not have. As a result, he believes significant changes to federal tax law are unlikely in the near future.
For Iowa producers, that could provide some stability when making financial decisions involving equipment purchases, farm expansion, and estate planning.
McEowen points to several provisions that remain in place under current law, including 100 percent bonus depreciation, the 20 percent qualified business income deduction, and the $15 million federal estate and gift tax exclusion.
He says those provisions are particularly important for agricultural operations, where major capital investments and long-term financial planning are common.
While several important tax provisions are permanent under current law, McEowen says producers should also pay attention to provisions scheduled to expire after 2028. Those will eventually require congressional attention and could become part of a larger tax policy debate following the next election.
He compares the need for predictable tax policy to agriculture’s need for a reliable farm bill. Both provide a framework that allows producers to make decisions with greater confidence about the future.
However, McEowen cautions farmers against making major purchases or other business decisions simply to take advantage of tax deductions. While tax incentives can help offset costs, the underlying economics of an investment should always come first.
Looking ahead, McEowen expects considerable political discussion, congressional hearings, and proposals concerning federal tax policy. But with President Trump’s veto authority remaining in place, he believes substantial changes to the tax code will be difficult to accomplish over the next two years.
For Iowa farmers and ranchers, his advice is to continue planning around the laws currently in place while keeping an eye on provisions that could require congressional action in the years ahead.
