AFBF Targets Tax Reform

The American Farm Bureau Federation has expressed to Congress how new Medicare taxes, the health insurance tax and penalties for failure to meet coverage requirements will harm U.S. farm and ranch families. The Medicare Contribution Tax is a tax on unearned income – such as capital gains – and AFBF says it will burden farmers and ranchers more than many other taxpayers since farming and ranching is a capital-intensive business. Also – the imposition of this tax when a farm or ranch is sold is like a retirement tax on ag producers – according to AFBF – since it will go into effect when farmers sell their businesses to fund retirement. AFBF says it could also affect beginning farmers because this tax on top of capital gains taxes will make it harder to acquire necessary land to start farming.

AFBF supports repeal of the 3.8-percent Medicare Contribution tax that will be applied to unearned income of so-called high-income taxpayers and the point-nine-percent Medicare Tax that will be imposed on wages and self-employment income above established thresholds for high-income individuals. Farm Bureau also supports legislation to repeal the Health Insurance Tax. AFBF says Rural American families already pay a greater percentage of their after-tax family income on health insurance than urban American families. The Council of Economic Advisors says nearly 25-percent of rural American families spend more than 10-percent of their income on health insurance coverage – compared to 18-percent of families in urban areas.