Farm Bill: Reforms Cut Off Subsidies To Wealthy
Filthy Rich Still Qualify
Not a subscriber to DTNag.com? Good. Maybe you'll think I came up with this description of the "income caps" farm bill conference principals have hammered out, when in fact it was Chris Clayton at the DTN Ag Policy Blog ("It's Done, Except for the Voting, Veto, etc.")
One of the final hangups was how to deal with adjusted gross income eligibility. Lawmakers agreed to cut off people from commodity payments if they receive more than $500,000 non-farm income. However, farmers can receive up to $750,000 in net farm income before direct payments are cut off. In theory, a person could have $499,000 in stock sales and $749,000 in net farm income and still collect direct payments.
Hmmm. How many tax returns have an adjusted gross income (income after most expenses and decductions) on them of $1,248,000? Let's consult the latest published IRS table on tax returns sorted by AGI:
| Adjusted Gross Income | Number of Returns | Percent of Returns | Average AGI |
| Total | 134,372,678 | 100.0% | $55,238 |
| No adjusted gross income | 1,761,041 | 1.3% | -$48,530 |
| $1 under $5,000 | 11,476,416 | 8.5% | $2,631 |
| $5,000 under $10,000 | 12,114,237 | 9.0% | $7,476 |
| $10,000 under $15,000 | 11,635,684 | 8.7% | $12,481 |
| $15,000 under $20,000 | 11,126,599 | 8.3% | $17,463 |
| $20,000 under $25,000 | 9,784,167 | 7.3% | $22,419 |
| $25,000 under $30,000 | 8,738,107 | 6.5% | $27,461 |
| $30,000 under $40,000 | 13,940,405 | 10.4% | $34,718 |
| $40,000 under $50,000 | 10,618,506 | 7.9% | $44,782 |
| $50,000 under $75,000 | 18,351,037 | 13.7% | $61,450 |
| $75,000 under $100,000 | 10,449,989 | 7.8% | $86,170 |
| $100,000 under $200,000 | 10,810,367 | 8.0% | $132,334 |
| $200,000 under $500,000 | 2,737,802 | 2.0% | $288,144 |
| $500,000 under $1,000,000 | 524,506 | 0.4% | $677,248 |
| $1,000,000 under $1,500,000 | 127,925 | 0.1% | $1,210,080 |
| $1,500,000 under $2,000,000 | 56,615 | >0.05% | $1,722,378 |
| $2,000,000 under $5,000,000 | 84,070 | 0.1% | $2,980,990 |
| $5,000,000 under $10,000,000 | 21,431 | >0.05% | $6,852,066 |
| $10,000,000 or more | 13,776 | >0.05% | $27,313,795 |
Source: Internal Revenue Service, 2005.
Looks like about three-tenths of one percent (0.3 percent) of all tax returns would exceed that amount. And what fraction of that fraction would be wrapped up in farm programs? I'd tell you but my microscope is on the blink.
Surely the conference committee leaders will be asked at their press conference later today how many people will be caught up in this subsidy crackdown? And how much money these historic "reforms" save taxpayers?
