May 16, 2008
Denver Post & Sen. Salazar Don't Understand AGI
Denver Post: Plowing Into the Farm Bill, by Anne C. Mulkern:
Sen. Ken Salazar, a Denver Democrat who supports the bill, disputed the idea that it pays rich farmers. The bill allows payments to farmers with adjusted gross incomes of $750,000 or less.
That number doesn't take into account deductions for the cost of running a farm, Salazar said. "A farmer with an adjusted gross income of $750,000 might be losing his shirt" after paying for fuel, a new tractor and other expenses, Salazar said.
The trouble is that Ken Salazar is wrong. Adjusted gross income is income after business expenses (and student loan interest and self-employed health insurance deductions), not before. Indeed, even gross income for tax purposes is after business expenses.
The amount of crop subsidies received are based upon gross cash crop sales, but the limitation on farm subsidies to prevent rich corporate farmers from unduly benefitting from them, are based upon adjusted gross income (see Section 1601 of the Farm Bill), which, for a farmer with no other form of income, is simply taxable profits from farming. The notion that our government needs to be spending $43 billion a year, more or less, subsidizing farmers making $750,000 a year net is absurd.
Update: The Tax Foundation's Tax Policy Blog has more here.
TrackBack URL for this entry:
Listed below are links to weblogs that reference Denver Post & Sen. Salazar Don't Understand AGI :
Tracked on May 19, 2008 10:44:37 AM
If a senator doesn't get AGI, is it any wonder that John Q. Public doesn't understand AMT? ? ?
Posted by: Steve Odem | May 17, 2008 8:11:53 AM