Failure to Extend Tax Cuts Could Cost Farmers Billions

If Congress fails to extend current tax provisions, America’s farmers and ranchers will be forced to pay $9 billion more in federal taxes every year. Tax relief enacted by the 2017 Tax Cuts and Jobs Act (TCJA) is set to expire at the end of this year, which would lead to tax increases for almost two-thirds of families, including those in rural America. In the latest Market Intel, American Farm Bureau Federation economists analyzed the impact of reverting to the previous tax code.

“The size of a federal tax bill can make or break farm profitability, particularly for small farms on the brink of breaking even,” the Market Intel states. “Each dollar that comes out of a farm family’s bank account to pay taxes is one less they can spend on improvements to their homes and farms, one less to hire an additional worker, one less to spend at other businesses in their community and one less they can put toward growing food, fiber and fuel.”

Important provisions like capital expense deductions, qualified business income deductions, and the estate tax would all be affected if Congress doesn’t act. The average farm would pay an additional $5,125 per year in taxes.

Farm Bureau President Zippy Duvall said, “Farm families, like all families in America, are struggling with higher prices. Farmers’ paychecks have shrunk at the same time because what they’re paid for their product has bottomed out, threatening the economic sustainability of rural America. Congress now has the opportunity to provide some stability for the men and women who work every day to ensure pantries are stocked for families across our country.”

Tax hikes could also lead to potential job cuts as farmers look for ways to save on expenses. Agriculture could lose as many as 49,000 jobs, equaling $3 billion in wages.

Read the full Market Intel here.

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