TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Thursday, May 15, 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.

As Wash Park Prophet notes:

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.

http://taxprof.typepad.com/taxprof_blog/2008/05/denver-post-sen.html

News | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef00e5524158b68834

Listed below are links to weblogs that reference Denver Post & Sen. Salazar Don't Understand AGI :

» DON'T KNOW MUCH ABOUT AGI from Roth & Company, P.C.
The TaxProf and the Tax Policy Blog make sport of both the Denver Post and Colorado senator Ken Salazar for... [Read More]

Tracked on May 19, 2008 7:44:37 AM

Comments

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 5:11:53 AM