Americas farm households would receive more than $4 billion in tax relief in 2003 under the President's plan for jobs and economic growth.
Secretary of Agriculture Ann Veneman hosted a conference call with farm broadcasters and editors from across the Nation yesterday to discuss the benefits that the President's jobs and economic growth plan would have on the farm sector of the economy. The Presidents proposals to eliminate the double taxation of dividends, accelerate the 2001 tax cuts, and increase the amount of capital investment that can be expensed by small businesses would provide over $4 billion in tax relief to farm households in 2003.
Roughly 85 percent of American farmers and ranchers would benefit as rate reductions passed by Congress in 2001 are accelerated to become effective immediately. Speeding up the tax relief would reduce the tax burden of farm households by $2.3 billion in tax year 2003 alone.
One third of all farmers, including one half of all farmers over 65, receive dividend income that is taxable. These farm households would receive average tax savings of over $1,600 in tax year 2003 under the Presidents plan. The total tax relief to farmers from the elimination of the double taxation of dividends this year would be $1.3 billion.
Small businesses, including farms and ranches, create the majority of new jobs and account for half of the economys private output. Current tax laws permit them to write off as expenses up to $25,000 worth of equipment purchases. The Presidents plan would increase that limit to $75,000 and index it to inflation encouraging them to buy technology, machinery, and other equipment they need to expand and create new jobs.
The increase in the limit for small business expensing would allow more than 90 percent of all investment in farm machinery and equipment to be immediately deducted. 97 percent of all farmers who purchase farm machinery and equipment would be able to deduct their entire investment. The Presidents plan would increase the amount of farm machinery and equipment that could be immediately deducted by $2.5 billion, or 20 percent, and would provide Americas farmers with more than $750 million in tax relief in 2003 alone.
Secretary Veneman urged Congress to move quickly and act on the Presidents plan for jobs and economic growth citing the enormous benefits it would have for the Nations farmers.