Hostname: page-component-7bb8b95d7b-s9k8s Total loading time: 0 Render date: 2024-09-12T10:35:11.093Z Has data issue: false hasContentIssue false
  • English
  • Français

The Effects Of Changes In Federal Income And Social Security Taxes On Farmers

Published online by Cambridge University Press:  09 September 2016

Michael Compson  and
Ron Durst
Michael Compson
Affiliation:
Rural Finance and Tax Section, Economic Research Service, USDA
Ron Durst
Affiliation:
Rural Finance and Tax Section, Economic Research Service, USDA
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper examines the impact of the Tax Reform Act of 1986 and the Social Security Amendments of 1983 on effective tax rates and average tax payments for farmers. The 1987 and 1988 Internal Revenue Service Individual Public Use Tax Files were used to estimate 1987 and 1990 tax rates and burdens. Results suggest that despite recent reductions in marginal income tax rates, the Federal income tax continues to be progressive. However, the regressive nature of the social security and self-employment tax greatly reduces the progressivity of the combined Federal income and payroll tax burden. For most farmers, combined social security and self-employment tax payments exceed Federal income tax liability.

Keywords

taxeseconomic incomeprogressivitysocial security
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 24 , Issue 1 , July 1992 , pp. 261 - 269
Copyright
Copyright © Southern Agricultural Economics Association 1992

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Budget of the United States Government, Fiscal Year 1992, U.S. Government Printing Office, Washington, 1991.Google Scholar
Bureau of Census, Housing and Household Economic Statistics Division, Income Statistics Branch, Washington, Washington, 1991.Google Scholar
Commerce Clearing House. 7997 U.S. Master Tax Guide. Washington, 1990.Google Scholar
Commerce Clearing House. Explanation of Tax Reform Act of 1986. Washington, 1986.Google Scholar
Congressional Budget Office Economic Forecast. Washington, January, 1990.Google Scholar
Jeremias, Ronald, and Durst, Ron. “Social Security Taxation: Impact on Farm Operations and Proposals for Tax Reform.” Washington: USDA, Economic Research Service Staff Report, AGES-840723, 1984.Google Scholar
Lewis, Gordon and Michel, Richard, ed. Microsimulation Techniques for Tax & Transfer Analysis. The Urban Press Institute, Washington, 1990.Google Scholar
Pechman, Joseph A. Federal Tax Policy. 5th. ed. Brookings Institute, Washington, 1989.Google Scholar
Rossi, Clifford and Durst, Ron, “Estimates of Farm Tax Progressivity,” Agr. Finance Rev., 49 (1989): 82–91.Google Scholar
U.S. Dept. of Agriculture, Economic Research Service, Farm Costs and Returns Survey of 1987. Washington, 1988.Google Scholar
U. S. Department of the Treasury, Office of Tax Analysis. Compendium of Tax Research 1987, Washington, 1988.Google Scholar
U. S. Dept. of Treasury, Internal Revenue Service, Statistics of Income Division. 1987 Individual Public Use Tax File. Washington, 1990.Google Scholar
U. S. Dept. of Treasury, Internal Revenue Service, Statistics of Income Division. 1988 Individual Public Use Tax File, Washington, 1991.Google Scholar