By Jamie Martin
U.S. farmers and ranchers could soon face a steep financial setback if Congress does not extend tax relief measures from the 2017 Tax Cuts and Jobs Act (TCJA). These tax provisions, which are set to expire at the end of this year, have helped support farm profitability across rural America.
If these provisions lapse, farmers will be required to pay $9 billion more in federal taxes every year. According to a Market Intel report from the American Farm Bureau Federation (AFBF), nearly two-thirds of American families will face increased taxes, including those in farming communities.
Key tax provisions such as capital expense deductions, qualified business income deductions, and adjustments to estate tax limits would be affected.
The average farm could see an additional $5,125 in taxes annually, reducing the money available for essential expenses and investments.
“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.
AFBF President Zippy Duvall emphasized the economic pressure farmers face. “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,” he said.
Higher taxes could also lead to cost-cutting measures such as job cuts, which may result in the loss of up to 49,000 agricultural jobs, equating to $3 billion in wages.
Photo Credit: american-farm-bureau-federation
Categories: National