Farmers Prepare for Fiscal Cliff Fallout

With only a handful of legislative days left in the current Congress, farmers are scrambling to prepare for the potential fallout of Congress’ failure to pass a major budget deal.

The looming fiscal cliff is an artificial effort by Congress to force Washington to tackle deficit reform. As a part of last year’s debt ceiling negotiations, congressional leaders attached a rider to the final negotiation requiring Congress to cut roughly $1 trillion from the budget deficit or face automatic across the board spending cuts and tax increases.

While these measures were designed to force Congress to tackle budget reforms, Washington gridlock has ensured that a deal has not been reached.

With the nation facing a plunge over the fiscal cliff, farmers across the country are worried  about the impact of higher taxes. If a deal is not reached, estate taxes could significantly increase next year, endangering many family farms. In addition, the increase of income taxes could cut into many farmers’ bottom lines.

In light of these expected tax increases, many farmers are buying up equipment and making necessary infrastructure improvements now, before taxes increase. Facing an uncertain economic future, economists are also recommending that farmers increase grain sales now in anticipation of a potential recession.

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Written by: Justin Ellison / Farm Plus Staff Writer