July 28, 2007

It's about Time

It's about damn time somebody limited the maximum income a farmer can make and still receive government subsidies. There is no reason why professional athetes and so forth who make millions or billions a year should be getting government farm aid. If the current farm bill passes, anybody making over $1 million a year would be ineligible for farm subsidies.

I also see no reason why the max income should not be lowered to $250,000 or even $200,000. This article, to me, makes no sense because they talk about farmers putting in huge up-front investments and benefitting the rural economy. The investments that you make in a farm are deductable just like any other business expense is deductable from the income made from the business. So, there's really no reason why a farm spending a great deal of its earnings on farm-related supplies and equipment couldn't go on contributing to the rural economy and still receive subsidies. They're talking about $1 million in adjusted gross income, which, if my tax knowledge doesn't fail me, is money made after expenses. (If I am wrong, please correct me, Danika).

At any rate, to me, rich people getting farm subsidies is paramount to rich people getting welfare checks. The money is there to help poorer farms make ends meet and continue to grow the grain needed to feed the country. It's to keep the industry and food costs stable, yes, but if you are making over $1 million a year in profits, there's no reason why the market can't be kept stable anyway. You have enough money to continue growing without help.

There is a big, corporate farmer who operates in the county where I grew up. He owns half the county and owns even more land in other counties and in southern MN. He shall remain nameless. My friend's dad worked for him for awhile, and the standard practice was to dump chemicals on the land to get the maximum production for as long as possible. My friend said her dad said that after three years the land was just sour. You couldn't grow anything because of all the chemicals (pesticides, fertilizer, herbicides, etc.) that they'd put on the land. When he buys land, he clears whatever trees are on it, and ditches it so as to drain it completely and send water pouring into the ditches, flooding out his neighbors who can't afford to hire drainage ditches dug the way he can. Basically, he can buy whatever he wants and is a poor steward of what he gets.

He was in so much debt because he bought so much land and equipment (overspent his means), but he got his debt forgiven by the government so that he could keep operating. So basically, he used his resources foolishly, overspent, damaged the environment, and hurt his neighbors, and the government still rewarded him. Meanwhile, other smaller farms are going under. Who will forgive their debts?

Farm legislation needs major reform, and this bill looks to me like an important step towards making sure that farm aid goes to the people who need it. Hooray Congress!

Posted by LoWriter at July 28, 2007 11:59 AM
Comments

I just don't know how bringing in 1 million dollars a year can be enough for anyone. That would be so hard. I would definitely seek governmental help.

And yes, adjusted gross income would be after you deduct all of your expenses.

Posted by: Danika at July 28, 2007 02:16 PM

AGI is after some deductions (IRA, HSA, qualified student loan interest, alimony), but before most of the rest. After all deductions is called taxable income.

Posted by: Jeremy at July 28, 2007 06:21 PM

If you have your own business, your adjusted gross income includes only your profits, which is the money you've earned after you take out deductions, inluding things like supplies, employee wages, rent, repairs, travel/meal expenses, utilities, etc. Then the other deductions you mentioned also come out. It's different if you have a business than it is if you just have wages.

Maybe self-employment (which is what farming falls under) is different than having your own business?

If you just have wages that someone else pays you, then I think you're right, your income after the deductions you mentioned is your taxable income, not your adjusted gross income.

Posted by: Lo at July 29, 2007 12:03 AM

Schedule C expenses are included in AGI. That's only business related expenses though, but you mentioned that. I was thinking personal deductions - I should have read closer before commenting.

Posted by: Jeremy at July 29, 2007 01:24 AM

Also, farming expenses are deducted on a schedule F, which is not the schedule C. Different things can be deducted for farmers, but it is along the same lines as a schedule C.

Posted by: Danika at July 29, 2007 11:36 AM

I think Danika's sooo right, I can barely make it by on my three million dollar income... how shall I survive without the government subsides?

Oh, and I should thank the government for their generous loans while I was getting through college. I still haven't figured out why I couldn't've gotten more than 6,000 a year, Bethel totally isn't expensive either.

This is like the oil company subsidies. Why do they need them? We don't know, but apparently they do. And I think rewards should be given to farmers who use the land correctly and don't burn it out, that could be a big bonus to those that try to save our biggest resource, Mother Earth.

Posted by: 10lees at July 30, 2007 09:53 AM
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