Source: POLITICO'S MORNING AGRICULTURE, 1/9/18

Only a week into the new tax law, attendees at the American Economic Association's conference presented data that may alarm some farmers. As first reported in The New York Times, three sets of papers released by economists with USDA's Economic Research Service raised issues about how the new law will affect agriculture.

Rich farmers to get richer: One study by James Williamson and Siraj Bawa examined components of both the House and Senate versions of the tax bill. They concluded that farm households with income in the top 10 percent will see the biggest declines in tax rates. Farm households in the 20th the 80th percentiles will see what the report described as "a modest reduction." Farmers in the lowest 10 percent of incomes will see their total tax liability rise. 

Behind farm losses: Another study by three other ERS economists -- Dan Prager, Sarah Tulman and Ron Durst -- examined why median farm income rose over the past two decades even though more than half of farms are losing money on their operations. Among the conclusions: some farms keep operating because of land appreciation while others have tax-loss benefits.

Watch out for trade deals' effects: Jayson Beckman and Munisamy Gopinath of ERS and Marinos Tsigas of the U.S. International Trade Commission noted just how much tax regulations can vary across commodities. Case in point: "The tax rate of fruit and vegetable farms is higher than that for cattle and calves operations, due in part to the corporate structure of a large number of fruit and vegetable farms," the study notes. 

It also says trade and tax changes are closely tied. "U.S. agriculture is a net exporter but subject to intense global competition and so, changes in tax reform that impacts U.S. production will likely affect the global economy," the study says.