The Effects of a Federal Flat Tax on Agriculture

This study examines the impact of a federal flat tax on agriculture by determining the tax liability under the current and flat tax systems using actual farm records. The study considers the linkages between agriculture and the rest of the economy by examining the impact of a flat tax on interest rates and capital investment and how those changes would affect agriculture. Results indicate that roughly 63% of agricultural producers would benefit from a flat tax in terms of lowering taxes paid. Under the flat tax, larger farms and more profitable farms would be relatively better off.