Add Pennsylvania farmers to the long list of people worrying about automatic spending cuts and tax increases scheduled to take effect Jan. 1 unless Congress works out a deal.
It’s really the automatic tax hikes the Pennsylvania Farm Bureau is concerned about when talk turns to the “fiscal cliff.”
Bureau president Carl Shaffer says he can’t imagine Congress would botch a chance to prevent such dramatic changes.
At the annual meeting of the bureau Tuesday, Shaffer predicted there will be a compromise.
“Because I think if there isn’t, you know, we’re past an election but there’s other elections coming, and I don’t think that’ll be forgotten too quick,” he said. “I don’t think it’d be justifiable on their part by not doing something.”
Without a compromise, the federal estate tax rate would jump by 20 percent, and the amount of land exempted from that tax would shrink, ensuring that small and large land farmers would both feel the pain.
The capital gains tax would rise by 5 percent, which is onerous for farmers that have to sell cattle or timber.
Farmers also stand to lose investment incentives that allow them to deduct large equipment purchases from their taxes.