New Farm Tax Package in the Works?
On September 11, 2007, Senate Finance Committee Chairman, Max Baucus (D-MT) discussed his goals for an agricultural tax package to be considered by the Committee. The package would include a series of agricultural tax credits, bonds and a trust fund as part of a farm bill that would provide billions of dollars in aid to farmers and pay for the nation’s nutrition programs. The cost of the tax proposals is estimated to be between $8 billion and $10 billion. That amount would be added to the bill’s baseline spending which is estimated to exceed $280 billion over five years. The next day, the Senator issued a statement urging the Senate to promptly pass a resolution that would raise the debt limit by $850 billion.
The proposed tax provisions include:
- The creation of a permanent agricultural disaster relief trust fund that would pay for weather-related disaster assistance designed to offset farming losses not covered by crop insurance.
- The creation of a new category of tax credit bonds for projects such as rural electric and telemedicine, rural broadband and other rural economic development community projects.
- An option for farmers receiving subsidies for conserving farmland to choose a tax credit instead of cash for easements.
- A clarification that Conservation Reserve Program payments are “rental income” that are, therefore, not subject to self-employment tax.
- Further incentives for bio-fuels and wind energy.
- Improvements to the “Aggie Bond” loans available to first-time farmers and ranchers.
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