Nationwide, family farmers are facing no shortage of challenges. This is certainly rings true in Maine, both for agriculture and other industries. Low prices, access to affordable land, too much regulation in some places and not enough in others, failing infrastructure, high health care costs, and the list goes on.
It is particularly alarming that Congress is trying to cut taxes for the wealthy and put a greater share of the nation’s tax burden on small family farms like mine.
For most family farmers, the benefits of this tax package are almost nonexistent. The estate tax could be repealed or the exemption at least doubled to about $11 million for individuals and $22 million for families. Our farm falls short of that threshold by orders of magnitude.
Certain deductions are increased to sizes well beyond the need of our small business. As an example, section 179, an important expensing tool that allows the full and immediate expensing of capital investments, increases from $500,000 to $1 million. That seems excessive by most family farm standards. Also, the deduction for domestic production activities ( section 199) is vastly reduced. This could do some significant damage to New England’s already fragile agricultural cooperatives.
Likewise, an important “carryback” provision is reduced from five to two years. So, when farmers experience net operating losses, they can’t recoup some of those losses from taxes they paid three to five years ago, as is the case now. This is especially tough as producers deal with farm income that is just half of what it was just four years ago.
But why limit it to agriculture? We are Mainers, not just farmers. We went to school (tax bill eliminates the student loan interest deduction and tuition waivers), we buy and sell houses (changes to interest deduction and capital gains), pay our local taxes (eliminates state and local tax deduction), many rely on public health care (77,000 Mainers use the Affordable Care Act health exchanges), and so on. Why make business reform permanent and personal reform temporary? Why does the top tax rate only apply to income over a million dollars when current law kicks in at above $470,000 for married couples? In fact, why change the rate structure to favor, on a percentage basis, high-income earners over the middle class and the poor?
The current tax proposals are regressive. In the past, a bipartisan group of presidents — Richard Nixon, Jimmy Carter and Ronald Reagan — pushed tax bills that followed population curves. In other words, the most benefits flowed to the middle class where the bulk of the population was. Recent tax cuts made under Presidents George W. Bush and Barack Obama were a departure in that more benefits flowed across income brackets relatively equally. But when looking at the current tax proposals, the value of the tax cuts skews to high earners and corporations in an alarming way.
The current tax plans are estimated to cost between $1 trillion and $1.45 trillion over 10 years. We need to ask: Is it worth it, and is it responsible? Washington is zero-sum city. When a hurricane hits our neighbors in the South, cuts to programs in the Departments of Agriculture, Education and Energy are proposed as offsets. Lost revenue will have to be coupled with reduced spending.
Current congressional plans indicate that welfare reform could be up next. So, cuts to nutrition programs and Medicaid certainly seem to be safe bet, but it’s doubtful the cuts will stop there. As a farmer, I’ve witnessed firsthand the impact of cuts under the 2014 farm bill, which has done little to benefit small farms and even less to benefit dairy farms. We can’t shoulder much more.
Maine is fortunate that it is represented by a bipartisan congressional delegation of independent-minded members. I sincerely hope that they will help return us to policies that favor families over corporations, the middle class over the rich, and that bring our fiscal house in order without slashing necessary government services.
Mary Castonguay is a dairy farmer from Livermore. She is on the board of the New England Farmers Union and a member of the National Farmers Union Policy Committee.
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