As a rule, farmers are much more interested<\n> in plowing, planting, spraying and harvesting than they are taxes.
But given the combination of laws enacted over the past few years by Congress and signed by the President, this is changing and must change.
It is irrational to be in business and not work to maximize profits. The Capitalist Economic System, upon which our Nation is founded, holds that everyone will work to maximize their profits — wealth — to the benefit of all.
The issue lies in the fact that as profits increase, so do tax rates. So if the tax rate disincentive to profits gets too high, everyone loses.
My issue is that the Affordable Care Act and the Taxpayer Relief Act ignore the benefits of hard work and profit to the economy and instead focus on maximizing “Governmental Revenue.”
There is no way in the limited space I have today, that I can outline all of these laws, taxes, rates and computations.
Therefore, I will be speaking in only the broadest of generalities. But make no mistake: the cost to the economy of these laws will be dramatic. Economic growth will suffer. Further as is always the case, they will not generate the dollars anticipated; tax increases never do.
From the Affordable Care Act:
New 0.9 percent Medicare Surtax;
New 3.8 percent Investment Income Surtax;
New $63 Annual Health Insurance Tax;
New 40 percent tax on some health plans;
Mandatory insurance coverage for employees of “large employers;”
Mandatory insurance policy specifics;
New 2.3 percent tax on all medical devices; and
New tax (rate to be set) if you do not purchase health insurance.
From the Taxpayer Relief Act:
Two percent increase in FICA Taxes;
Increase in maximum capital gains rate to 20 percent;
New maximum income tax rate of 39.6 percent;
Means Testing for personal tax deductions; and
Increase in estate tax rate to 40 percent.
While there are many more taxes and changes contained in each law, I believe everyone gets the idea.
Taxes are going up for everyone, and I fear the increases will be dramatic for agriculture.
Editor’s Note: Michael Evanish is the manager of MSC Business Services, a member service of the Pennsylvania Farm Bureau. MSC Business Services provides Business Analysis, Consulting, Income Tax and Tax Planning, and Payroll Services to businesses throughout Pennsylvania and Maryland. For more information call 717-731- 3517.