By Cole Lauterbach
Illinois News Network
Congress is contemplating a tax deduction that saved Illinois farmers hundreds of millions of dollars in 2015.
The interest deduction is used by farmers in nearly every aspect of their operation. Land, equipment, even seed to plant are typically financed by loans. There’s discussion of getting rid of that deduction in Washington in order to raise revenue that would offset tax cuts.
According to the USDA’s National Agricultural Statistics Service, Illinois Farmers saved $460 million in lower taxes in 2015 solely because of this deduction. That’s more than $6,000 per farmer.
Adam Nielsen, director of National Legislation and Policy Development with the Illinois Farm Bureau, said that couldn’t come at a worse time for farmers.
“We know that we’ve seen a four-year drop in prices that takes us back to levels that we haven’t seen in 15 years,” he said. “Net farm income is going to be the lowest since 2002 as well.”
At an average age of 58, farmers are getting older. Nielsen says the next generation of farmers will need affordable financing.
Nielsen adds that there could be a small business exception, but no legislation has been filed yet, so it’s hard to tell.