Issue Brief:

Tax Cuts for Owners of Agricultural Land

Farming is one of the largest industries in the United States and affects the
largest number of citizens across all states. There are approximately two million farms
in the United States and over three million farmers maintaining the land. I personally
grew up on a farm and I know the upsides and the downsides of farming. My family’s
plot is about 2,200 acres and we grow soy, corn, wheat, and barley. Farming is a
gamble. There are a multitude of variables that can absolutely destroy an entire crop
that are outside of the landowner’s control. It is for this reason that I would like to
propose a national cut to the property taxes of farmers whose land is being used for
commercial agriculture purposes. This cut would come as a 20% standard refund of
total property taxes paid on farm overhead.
Agricultural outputs have been steadily decreasing over the last 15 years and
nearly 200,000 farms have been foreclosed on in the last 10 years. This is due to the
high cost of farming and the gamble of whether or not the crop with grow or if
something will go wrong causing the death of the crop. This is a huge issue because
the population of the US is steadily increasing and with less farms to feed the
population. Importing foods is an option, but this in the long term would be more
expensive and has its own plethora of destructive variables. Additionally, most farms
are insured for crop loss, but this doesn’t cover as much as one might think. From
personal experience, my family’s farm had two bad crops in a row resulting in a 1.2-
million-dollar loss and insurance only supplemented $250,000 of the loss. In addition to
the risk of farming, it is a high cost industry. Most of the time the land, machinery,
seed, livestock, etc. are owned by a single family, not large corporations who have the
means to make up for such large amounts of overhead during times of loss. Something
must be done on the part of the government to assist these hardworking Americans.
My proposed solution is a a national cut to the property taxes of farmers whose
land is being used for commercial agriculture purposes. This cut would come as a 20%
standard refund of total property taxes paid on farm overhead. The most effective way
to achieve this percentage is to gradually increase it by 5% over four years. This allows
for changes in other budgets to be made before the full amount is being released back
to the tax payers. To subsidize the loss of income from the farmers property taxes I
propose the following budget cuts be made: 1% cut to the defense budget, 5% cut to
the welfare budget, 3% cut to the Medicare and Medicaid budgets. These cuts will be
made with the ability to adjust over the four-year adjustment period of the refund of
total property taxes paid on farm overhead.
To conclude, the farming industry in the United States is in trouble and it affects
a large number of states from coast to coast. Outputs are steadily dissipating and
farms are closing at a rapid rate. It is time for government intervention as an attempt to
save the livelihood of these blue collared American workers. My proposed solution of a
a national cut to the property taxes of farmers whose land is being used for
commercial agriculture purposes would assist in ensuring the sustainability of the
remaining farms in the US and the availability of a prosperous future for the industry.

Works Cited:
Aiken, J. David. “Nebraska & Surrounding States' Agricultural Property Taxes as a
Percentage of State Net Farm Income Compared to the US Average, 1950-2017.”
University of Nebraska - Lincoln, 23 Jan. 2019. This article shows the need for tax
reform in Nebraska and surrounding states. This is because of the outlandish amount of
money landowners pay in property taxes. A bill to allow 30% of all property taxes for
landowners to be returned in their tax refund was brought up in state legislature, but
failed.
Beckman, Jayson, et al. “The Impacts of Tax Reform on Agricultural Households.” American
Journal of Agricultural Economics, vol. 100, no. 5, 27 Oct. 2018, pp. 1391–1406., doi:
10.1093/ajae/aay038. Agricultural tax reform typically refers to macro-economical
situations. Legislature needs to cover the smaller aspects of Agriculture too because it
is causing a fall in agricultural outputs. This is due to small scale farms having a hard
time keeping up with the market because of their income to tax ratio is less offset.
Dinterman, Robert, et al. “Financial Stress and Farm Bankruptcies in US Agriculture.”
Agricultural Finance Review, vol. 78, no. 4, 6 Jan. 2018, pp. 441–456., doi:10.1108/
afr-05-2017-0030. More and more farms are filing for chapter 12 Bankruptcy over the
last 20 years. This is due to financial stress on landowners.
Douma, Michael J. “20th Century U.S. Agricultural Policy.” Sage Knowledge, 2 Jan. 2019, doi:
10.4135/9781526462046. This article shows the need for the evening out of agricultural
tax brackets. Many small scale farmers are not covered as significantly as they should
be in comparison to large scale farmers.
“The Economics of Farmland Conversion.” Under the Blade: the Conversion of Agricultural
Landscapes, by Richard K. Olson and Thomas A. Lyson, Westview Press, 1999. This
chapter expresses the needs for proper farm profit growth and management. This is
important to understand so legislation can assist in these areas.