Farmers Should Focus on Effective Tax Rate

Farmers Should Focus on Effective Tax Rate

As Congress considers changes to the federal tax code, AFBF Economist Veronica Nigh explained in Newsline that farmers and ranchers need to consider how proposed revisions will impact the overall effective tax rate for their agricultural businesses.

“What we really care about aren’t necessarily the bracketed rates, but rather how those rates interact with other provisions within the tax code,” Nigh said. “So, we start layering one provision with another and at the end of all that layering, you end up with an effective tax rate. Basically, what is the percentage of your income that you have to cut a check for to the federal government?”