President Donald Trump proposed cuts to farm programs in the 2019 federal budget, but the longer-term goal should be to fully repeal all farm subsidies.
3 In the 1980s the Reagan administration proposed cuts to farm subsidies, but farm finances took a bad turn, and that prompted Congress to increase farm aid, not reduce it.
Federal farm policies damage the natural environment in a number of ways.
The USDA examined farm taxation in 2001 and found that "In general, income from farming is taxed more favorably than income from many other businesses."51 The USDA also noted: "This favorable tax treatment is reflected in the size of farm profits and losses reported for income tax purposes. Since 1980, aggregate farm losses have exceeded farm profits and are used to offset taxes on off-farm income."52.
The USDA reports that "About half of all farm partnerships and small business corporations also report losses" on their tax returns in a typical year.59 Recent IRS data show that farm S corporations do report aggregate net income on their tax returns, but the ratio of net income to revenues for farms is a bit less than that for all S corporations.
62 The USDA found that "While many commercial-size farmers pay taxes on their farm income, farm sole proprietors in the aggregate pay little in federal income tax on farm income."63.
A number of major farm programs expire at the end of September 2018, which provides Congress a chance to rethink its costly farm policies.
https://www.cato.org/publications/tax-budget-bulletin/reforming-federal-farm-policies
3 In the 1980s the Reagan administration proposed cuts to farm subsidies, but farm finances took a bad turn, and that prompted Congress to increase farm aid, not reduce it.
Federal farm policies damage the natural environment in a number of ways.
The USDA examined farm taxation in 2001 and found that "In general, income from farming is taxed more favorably than income from many other businesses."51 The USDA also noted: "This favorable tax treatment is reflected in the size of farm profits and losses reported for income tax purposes. Since 1980, aggregate farm losses have exceeded farm profits and are used to offset taxes on off-farm income."52.
The USDA reports that "About half of all farm partnerships and small business corporations also report losses" on their tax returns in a typical year.59 Recent IRS data show that farm S corporations do report aggregate net income on their tax returns, but the ratio of net income to revenues for farms is a bit less than that for all S corporations.
62 The USDA found that "While many commercial-size farmers pay taxes on their farm income, farm sole proprietors in the aggregate pay little in federal income tax on farm income."63.
A number of major farm programs expire at the end of September 2018, which provides Congress a chance to rethink its costly farm policies.
https://www.cato.org/publications/tax-budget-bulletin/reforming-federal-farm-policies
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