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Spending Money on Farmers Through the Tax Code

2 min readBy: Gerald Prante

We all know that farmers don’t get enough money from Washington through traditional spending means (i.e. direct appropriations). So Senator Max Baucus (D-MT) feels it is necessary to further increase spending to farmers indirectly through the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. code. From the Associated Press:

The chairman of the Senate Finance Committee is proposing a series of agricultural tax credits, bonds and a trust fund as part of a farm bill that would give billions in aid to farmers and pay for the nation’s nutrition programs.

Montana Sen. Max Baucus, a Democrat, said Tuesday that his committee will find an extra $8 billion to $10 billion through new agriculture-related tax proposals. That would be added to the bill’s baseline spending, estimated to be more than $280 billion over five years.

The finance panel’s proposals include a trust fund that would pay for weather-related disaster assistance – a priority in Baucus’s home state. That could set up a fight with Agriculture Committee Chairman Tom Harkin, D-Iowa, who would rather use extra money for conservation programs that protect environmentally sensitive farmland, nutrition programs and other agricultural needs.

Harkin said Tuesday that a disaster fund is difficult to manage because losses are unpredictable. He has suggested revising the way subsidies are distributed instead, allowing farmers to collect payments when state-averaged revenues are low.

Under (Baucus’s) proposal, farmers who receive subsidies for conserving farmland would be able to choose whether they want tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. s or federal cash. The plan also includes tax credit bonds for projects such as rural electric and telemedicine, rural broadband and other rural economic development.

Baucus said he also intends to include proposals that were part of an energy tax bill that stalled in the Senate earlier this year, including tax incentives for wind energy and biofuels.

The theme of the article is basically that there is no difference between Sen. Baucus wanting to give handouts to farmers through the tax code and Sen. Harkin wanting to give handouts to farmers through direct spending. But you can be sure that Baucus will call his measure a tax cut rather than a spending program, and he’ll also say that he still supports overall tax reform and simplification.