* One thing I overlooked while in
* the US was the taxation system, how is
* expenditure on new buildings and machinery
* treated ?
*
* Tom Mason Canterbury NZ
I believe that I can reply to this.
The tax system in the USA is GREAT, IDEAL for farming.
With regard to PROPERTY TAX, in many locales (but not all over the US), the
property tax is applied only to the agricultural value of the farm.
This results in huge tax savings to farmers. Some of this tax is recovered if
the land is sold out of agricultural production. They often go back about 5
years.
This system is designed to encourage land to remain in farming. It works.
SALES TAX. Agricultural inputs are not subject to sales tax in most locales
in the USA. This is to encourage purchase of large amounts of agricultural
inputs. This works great to encourage farmers to spend.
FEDERAL INCOME TAX. There is absolutely no reason why a farmer in the United
States should ever pay income tax on farm income.
In almost all cases, depreciable items (like farm machinery) purchased during
the year can be deducted fully in the year of purchase, up to the full amount
of what would otherwise to taxable income. This is the Section 179 deduction.
None of these are tax dodges.
Congress has designed these tax incentives to encourage farmers to remain in
business, and spend their income for increases in production and for
expansion.
Lots of American farmers do pay substantial income taxes, but they should not.
If they would just bestir themselves, to take advantage of congress's intent,
they should never pay income tax on the farm portion of their income.
Congress and the Nation does not want farmer's tax money.
Congress and the Nation absolutely do want America's farmers to expand so they
can compete fiercely among themselves. The National tax policy is crafted to
do exactly this.
--
Kindest regards,
========================
F. W. Owen
Owenlea Holsteins
9430 Spencer Road
Homerville, Ohio 44235
e-mail fwo@bright.net
home page http://www.bright.net/~fwo
voice & fax 330.625.2369
cell 330.635.2287
========================
