Impact Of Tax Reform On Agriculture And Family Farms

Author : Jayson Beckman
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Download or read book The Impacts of Tax Reform on Agricultural Households written by Jayson Beckman and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimates of tax reform's impacts usually concentrate on macroeconomic impacts, but attention at the industry or sectoral level is often limited. Our study uses a computable general equilibrium (CGE) model to estimate the disaggregated impacts of the Tax Cuts and Jobs Act (TCJA) of 2018, which lowered personal and corporate tax rates. Focusing on agriculture, we use survey data to calculate how the TCJA would change the tax rates faced by farmers at the sector level. We use Internal Revenue Service data to calculate tax rates for all other producers. We then simulate the economy-wide and sectoral effects of TCJA. We find that the TCJA would cause a reduction in agricultural output as resources would be reallocated to other sectors. Using our survey data, we extend the CGE results to measure the impacts to farm households--from changes in on- and off-farm income. We find that most farm households would have income gains from tax reform. Our tax reform scenario highlights the fact that investment weighs heavily on model results. That is, firms that are attractive to domestic and foreign investment have gains in demand for their products, while other sectors, such as primary agriculture, experience decreases in production. A sensitivity analysis that reduces the attractiveness of the United States in foreign investment shows smaller impacts of TCJA, especially for macroeconomic variables.