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The family farm remains the backbone of agriculture in Arizona where 95% of farms are family farms.

There are many stresses on our industry: water and workforce shortages, market volatility, supply chain issues, rising costs for fuel, and natural disasters like ongoing drought and wildfires in the West. Meanwhile, the Biden administration and Congress have proposed a host of corporate and inheritance tax increases that would significantly hamper Arizona farmers and ranchers already operating on razor-thin margins.

In particular, if we want to protect family farms in this country, it’s vital that we make it possible for these operations to be passed down to the next generation. Increasing capital gains taxes while repealing the beneficial provisions of stepped-up basis would create enormous tax burdens to family-owned farms in Arizona and nationwide.

It’s also vital that the federal government retain Section-1031 exchanges, a century-old tax provision that gives farmers and ranchers financial flexibility to invest in their operations and agricultural land. Farmers and ranchers invest years of their hard-earned income on upgrading and expanding their agricultural land investments, which are made possible due to provisions like Section-1031.

Now is the time to support Arizona agriculture, an industry that contributes 23.3 billion dollars to our economy and is an integral part of our state’s history. The Arizona Farm Bureau urges U.S. Senators Kyrsten Sinema, Mark Kelly, and Arizona’s congressional delegation to oppose tax increases and elimination of beneficial provisions that would hurt the agriculture industry and limit the ability of farmers and ranchers to pass their operations down to the next generation.

(6) comments

RetAF

Bill Gates is the largest 'family' farm owner in Arizona with 24,000 acers as of 2017. Just because they claim to be a family farm doesn't mean big business isn't the real owner.

Bob Smith

Spot on, the writer invoked family farms but left out Mom, Apple Pie and Jesus.

ronzim

Although Biden has not proposed directly altering the estate tax, his plan to tax unrealized gains at death would “effectively” lower the estate tax threshold, Gleckman wrote in June. Even still, certain family-owned and -operated businesses, including farms, would be protected, so long as they stay in the family.

phxnative54

They'll certainly do a LOT more good for a LOT more people than Trump's disastrous 2017 tax cuts did:

"The independent, non-partisan Congressional Research Service just released a report showing that the 2017 tax cuts for the richest Americans and corporations did not work. This confirms what anybody who has been looking at the data already knew. Investment did not boom and workers will not see the promised bump in pay . Instead, the federal government incurred massive deficits while wealth inequality increased to its highest level in three decades." - Forbes

infringed2

Regardless of what some opinion writer said at Forbes, FY 2019, FY 2020 and FY2021 consecutively are the highest revenues ever reported to the Federal government. At the same time investment gains and my 401K rose unbelievably under Trump's administration. I really don't care if someone else got richer. The root of all socialism is the disregard of the tenth commandment. Tearing down the rich does not and never has made the poor any richer.

ronzim

I consulted the IRS’ Data Book, Table 1 for the years 2011-2020 with the following results: Individual, estate and trust taxes rose from $1.8T in 2017 to $2T in 2019 and then declined to $1.9T in 2020. Business income taxes declined steadily from $0.3T in 2017 to $0.25T in 2020.

What is more, Corporate tax revenues fell 31% in the first year after the cut was passed. Overall tax revenues have declined as a share of the economy in each of the two years after the tax cut took effect. The Brookings Institute found “Nominal revenues rose because of inflation and economic growth. Adjusted for inflation, total revenues fell from FY2017 to FY2018. Adjusted for the size of the economy, they fell even more. The TCJA’s changes mostly affected the corporate and individual income taxes. The act reduced the top corporate tax rate from 35% to 21%—a 40% reduction. Actual corporate income tax revenue in FY2018 was $135 billion lower than CBO’s projection from 2017—almost exactly a 40% decline.”

None of these findings should be surprising. Almost every major analysis of the legislation correctly predicted that revenues would fall in 2018 relative to a scenario without the tax cuts, with sources ranging from government entities such as the CBO and the Joint Committee on Taxation, to non-governmental think tanks such as the Urban-Brookings Tax Policy Center and the Tax Foundation, academic researchers in studies by Robert Barro and Jason Furman, and in analyses using the Penn-Wharton Budget Model. Neither is there any prospect for any future gains.

Moreover, the tax changes that benefit lower-income people expire in 2025, while the measures that largely affect higher incomes do not. Of the $487 billion in “new investments” recorded in the New Investments spreadsheet, a total of $435 billion is by three companies—Apple, Comcast and ExxonMobil. A close examination of their “investments” indicates they are unlikely to be due to the tax cuts. Only about seven million workers got one-time bonuses or hikes which is a scant 4.3% of the work force.

The fact is that most corporate beneficiaries spent their tax savings on stock buybacks not on new investments or employee compensation. In addition, the national savings rate went up after TCJA because wealthy households increased their savings not their spending or investments. Here in Arizona, the average tax cut for the top 1 percent in 2019 was $54,250 while the average tax cut for the bottom 60% was just $410, according to the Center on Budget and Policy Priorities.

Increases in the stock market are occasioned by what investors conclude about future returns which are based on corporate profit expectations. Villanova University reports that “One short-term impact of the TCJA was an increase in gross domestic product (GDP) of 4.2% in the second quarter of 2018 and 3.5% in the third quarter of the year, according to Vox. However, a Brookings Institution analysis of the tax cut’s impact on the economy two years after it was enacted determined that the TCJA will have minimal effect on long-term economic growth.”

In short, the impact of tax cuts on the economy and the market hinge in what level of income earners received the cuts. The marginal propensity to spend new income is very near zero at the top and very near 100% at the bottom; thus, the TCJA cuts have little economic effect (beyond the initial bump) because they went far too much to those already wealthy who have not spent nor invested the windfall.

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