Income Tax and Beef Prices?

[Ben H]

Somebody made a comment the other day that got me thinking. They said something along the lines of making an assumption that my cattle herd is a way to write off the income from my off farm job (which is really nothing to brag about). I replied that my animals need to make a profit, otherwise all the time I put into them wouldn't be worth it. I said my goal is to grow to a point where they aren't only self sufficient, but can support me as well. Looking at his point of view, he works for his Grandfather who owns a construction company. The farm is very very heavy on machinery and likely is in fact a big tax write off.

I'm sure many of you have seen the statistics that the majority of beef cattle in this country are in very small herds. Most of which likely operate at a loss. Obviously, this keeps the prices down. So here is the question, if there was no IRS, no income tax, nothing to write off, what would happen to beef prices? How many herds with other income would still be operating at a loss?

 

[burnt]

Good question. Yesterday at the stockyards a retired farmer stopped in to take a look-see. His former neighbor asked him if he still had cattle. "Yup, but I don't do any chores - I let somebody else do the work. There are benefits to being still be classed as a farmer . . ."

 

[cure]

There is a web site that shows how much money farms are getting from the government. A few years ago I look at it and couldn't believe what I was reading Scotty Pippen who played with Micheal Jordon, Jerry Sloan the head coach for the Utah Jazz, and Nolan Ryan the baseball great were the highest on the list for receiving money. I truely believe that if you took away not only the income tax but also the 10 31 tax and government grants that the people that are in the beef, dairy, and any other form of ag. Will run the operation to make money or they will get out and you will see the price of things work themselves out to where we can afford to grow it and the comsumer can afford to buy it.

 

[Ben H]

What would Regan say?
http://www.youtube.com/watch?v=cEuiI2PbSWQ

 

[Anonymous]

There is a web site that shows how much money farms are getting from the government. A few years ago I look at it and couldn't believe what I was reading Scotty Pippen who played with Micheal Jordon, Jerry Sloan the head coach for the Utah Jazz, and Nolan Ryan the baseball great were the highest on the list for receiving money. I truely believe that if you took away not only the income tax but also the 10 31 tax and government grants that the people that are in the beef, dairy, and any other form of ag. Will run the operation to make money or they will get out and you will see the price of things work themselves out to where we can afford to grow it and the comsumer can afford to buy it.

I know some folks that have land/corporate entities in the names of not only their kids, mistresses, and hired men-- but I've often thought if you checked close enough you could find their dogs name-- just so they can get around the maximum requirements and further milk the system....

I thought years ago when they came out with the "Freedom to Farm Act" and did away with quotas and the government telling you what you could plant they were going to do away with government involvement (which included the subsidies) ... What a joke...
And neither cult will move to rid the subsidies and big payouts as either they are in the pockets of the lobbyiests getting the big payouts- or on the other hand in the pockets of the folks they want to keep cheap food available to as a way to keep their vote .....

 

[Kato]

Send them all up here to try and live off of Canadian style farm programs. That'll weed 'em out quick! :lol: :lol: :lol: :lol: :lol:

 

[mrj]

While I don't know those guys business(the 'famous' names listed as getting big subsidies), or how they operate, I can tell you that at least one true family owned and operated ranch in western SD whose labor is family and friends that we trade work with, with rare day help that is paid, is not getting any big government payments.

We do not raise any grain, and the little hay ground we have to occasionally re-plant has at times been under one or another of the conservation programs USDA has tried out. Rarely does it cover more than a fraction of the cost of hiring that work done, plus the seed cost.

Same for any dams built, or any other conservation project we have done.

Re. the grain programs and 'corporate' farms: the fact is that around 98% of all farms are family farms, and yes, some are incorporated, and are extended families. Granted, there may be some abuses, but, I'd bet abuses in agriculture pale in comparison to the other industries, and certainly to quasi-governmental programs. Think ACORN and it's many 'twins'.

The USDA area with the greatest potential and obvious abuse is the 'food programs'. Food Stamps, now called ABT cards, and appear and are used like an ordinary credit card take over 95% of ALL funds administered by USDA, including 'farm subsidies', as I understand it. Yet, even 'our own' are quick to point the finger of blame for abuses at even honest use of 'farm programs and subsidies'. How convenient is that for the politicians and users/abusers of those consumers' welfare programs???

I did hear a news release in the past week ENCOURAGING people, especially beginning, or 'first time' farmers to get into some USDA program for 'small' farmers and it seemed to me it was PROMOTING 'tax write off' benefits or raising cattle, and definitely of alpaca's. Apparently that is what has been driving the high prices for those cute little critters!

mrj

 

[Anonymous]

While I don't know those guys business(the 'famous' names listed as getting big subsidies), or how they operate, I can tell you that at least one true family owned and operated ranch in western SD whose labor is family and friends that we trade work with, with rare day help that is paid, is not getting any big government payments.

We do not raise any grain, and the little hay ground we have to occasionally re-plant has at times been under one or another of the conservation programs USDA has tried out. Rarely does it cover more than a fraction of the cost of hiring that work done, plus the seed cost.

Same for any dams built, or any other conservation project we have done.

Re. the grain programs and 'corporate' farms: the fact is that around 98% of all farms are family farms, and yes, some are incorporated, and are extended families. Granted, there may be some abuses, but, I'd bet abuses in agriculture pale in comparison to the other industries, and certainly to quasi-governmental programs. Think ACORN and it's many 'twins'.

The USDA area with the greatest potential and obvious abuse is the 'food programs'. Food Stamps, now called ABT cards, and appear and are used like an ordinary credit card take over 95% of ALL funds administered by USDA, including 'farm subsidies', as I understand it. Yet, even 'our own' are quick to point the finger of blame for abuses at even honest use of 'farm programs and subsidies'. How convenient is that for the politicians and users/abusers of those consumers' welfare programs???

I did hear a news release in the past week ENCOURAGING people, especially beginning, or 'first time' farmers to get into some USDA program for 'small' farmers and it seemed to me it was PROMOTING 'tax write off' benefits or raising cattle, and definitely of alpaca's. Apparently that is what has been driving the high prices for those cute little critters!

mrj

So Maxine-- you say you haven't gotten any subsidies/drought payments-- EQUIP money--Conservation Grants- or Conservation reward money- or put your land into conservation easements- or sold out to the NCBA Nature Conservancy---- all of which if you look hard are paid for by the government and/or the Greeny Weenies.... :???:

If so-- more power to you-- but that is not what I've heard.....

 

[mrj]

I did NOT say we had not received any money for any programs, only that the money those programs pay does not make one 'rich' after the expenses of doing the work properly.

I would be very interested in learning what you "have heard". You should be aware that some people are all too willing to 'talk' about the business of others, even when they have no way to know the facts, and generally what they tell as 'fact' is far from it.

I believe that the conservation programs, to pay for things that are pretty close to being mandated by government, especially by EPA darn well SHOULD be paid for with tax money.

However, it seems to me it would be far better for EPA to simply be eliminated and allow local zoning laws, with some sort of peer dominated arbitration available for contested decisions, concerning land use.

mrj

 

[Ben H]

This is the website to find out how much your neighbor makes from subsidies: http://farm.ewg.org/

If you look up my zipcode, my name will pop up, clicking on it shows that I received just over $50K last year from EQIP. What it doesn't show was that I spent about that much in implementing the practices, then it's taxable income.

But this isn't a discussion on subsidies. This is about the IRS and the Income tax, what would happen to beef prices if people couldn't hide profit in other areas by having losses with their farms? I think the elimination of the income tax could only help beef producers who are in it for the money.$

 

[Clarencen]

We always hear about people who farm or ranch for a tax write off. I am not as smart as some, but I still can not see where there is any gain by losing money on one interprise to save paying taxes from another. Why keep putting more effort into something if taxes take up the additional profit.

Maybe it made a little sense back before the Reagon Tax plan where there was the ultr- high tax brackets but today I can't see it.

As for the farm programs, that is something that needs to be discussed. I believe the government does have a concern that we always have an adquit food supply, and farmers and ranchers need ways to stay in business but I really don't believe in subsidies.

The things posted by the Enviornmental Working Group on the internet is a real eye opener. I have received small amounts of government help ever since I started farming and ranching. Only a few times did it really help. When there was the payment in kind program, it came at just the right time for us we had a good feed grain base and were changing our operation to grass farming. Then I think it was 1989, the diasaster feed program really did help us stay in business.

 

[mrj]

What we really need is a total overhaul of USDA, beginning with a clear explanation of EXACTLY what is being done under the control of USDA and where and how and on whom the money is really spent as it stands currently.

We need a statement of goals for the USA regarding agriculture and farmers and ranchers place in food production in this country. An honest evaluation of what our food would cost if all direct crop subsidies were ended seems clearly necessary. Average costs for food for all citizens currently is less than 9% of disposable income. That is far lower than most other nations. If it includes subsidized food such as the WIC program, lower than cost school meals, and food stamps, then that needs to be shown, but who knows whether that is considered now?

Ben, I believe the IRS, tax breaks, EPA and other regulatory/activist driven agencies, are so intertwined with USDA that it is about impossible to sort out who drives many ag programs.

Tax write off farming, or any other business for that matter, may have their place, but should be clearly defined and identified, and certainly limited. Possibly wartime needs, or to ward off effects of devastating weather, earthquake, etc. would benefit enough people to make it 'fair', if there is such a thing where government is involved.

Don't we need to know where we are to figure out where we want or need to go with USDA?

Our citizens, as well as all ag producers need to know the facts about what USDA does and what it is supposed to do, and why.

How much of the budget goes to manage public lands, parks, etc. And how much of the 'subsidies' to farmers such as crop insurance is actually based on premiums paid by the farmer? How much is due to regulations demanded either by citizens or overzealous regulatory agencies driven by activist groups such as the 'greenies'?

mrj