Issues of concern to people who live in the west: property rights, water rights, endangered species, livestock grazing, energy production, wilderness and western agriculture. Plus a few items on western history, western literature and the sport of rodeo... Frank DuBois served as the NM Secretary of Agriculture from 1988 to 2003. DuBois is a former legislative assistant to a U.S. Senator, a Deputy Assistant Secretary of Interior, and is the founder of the DuBois Rodeo Scholarship.
Wednesday, June 07, 2017
Plusses and Minuses for Agriculture with Border Adjustability Tax
A relatively new proposal for a tax system that imposes taxes where a good or service is consumed rather than where it is produced could be a mixed bag for farmers and ranchers. Under the system, known as the border adjustability tax, U.S. exports, including the 25 percent of farm and ranch goods sold overseas, would cost less, making them more appealing to foreign buyers. On the flip side, products imported into the U.S., like many of the inputs farmers rely on, would cost more.
“The border adjustability tax would ultimately make all of the products U.S. farmers and ranchers send overseas 20 percent less expensive. That’s a big plus for any highly exported commodity,” explained Pat Wolff, American Farm Bureau Federation tax specialist.
On the import side of the equation, under the new tax system, the cost of imported goods and services would no longer be deductible, leading to a larger income tax liability for companies that import goods. Wolff encouraged farmers and ranchers to consider how the border adjustability tax will help or harm their businesses.
“They need to take a look at how much of their product goes overseas, and compare the potential benefits of export sales with the additional costs of the imported inputs they use.”
Once farmers and ranchers have a handle on the plusses and minuses of the border adjustability tax, their next move should be a call or email to their congressional lawmakers.
“This is a serious proposal. Senators and representatives need to know how their constituents will be affected,” she said. The border adjustability tax was included in the House Republicans’ tax reform blueprint, which was released last summer...more