With President Obama and congressional leaders scrambling to reach a budget agreement that prevents the US from going over the fiscal cliff, farmers are nervously watching the negotiations to see how they will impact the farm industry.
The upcoming fiscal cliff is an impending tax increase and across the board spending cut originally devised as part of last year’s debt ceiling negotiations. In order to agree to increasing the debt ceiling, congressional leaders inserted a clause requiring billions of dollars in deficit reductions. If these goals were not met, across the board spending cuts would go into effect.
In addition to these motivational spending cuts, the Bush tax cuts, temporarily extended at the end of 2010, are set to expire in January, leaving millions of Americans with the prospect of significant tax increases in the coming year.
Farmers, in particular, would be hit hard by these tax increases. The reintroduction of 90s era estate taxes could eliminate many of the protections farmers currently enjoy, opening up many farming operations to estate taxes. In addition to worrying about money, some farmers are hoping that an agreement on the farm bill can be reached as part of the fiscal cliff negotiations.
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Written by: Justin Ellison / Farm Plus Staff Writer