Chapter
FEDERAL TAX POLICIES AND RURAL HOUSEHOLDS: IMPACT AND POTENTIAL REFORM
FEDERAL TAX POLICIES
AND RURAL HOUSEHOLDS:
IMPACT AND POTENTIAL REFORM
LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA
Chapter 1:
FEDERAL TAX POLICIES AND LOW-INCOME
RURAL HOUSEHOLDS
How Was the Study Conducted?
INCREASED USE OF TAX CODE FOR
SOCIAL POLICY GOALS
SIGNIFICANT FEDERAL TAX POLICY DEVELOPMENTS
Child and Dependent Care Credit
RURAL AMERICA RECEIVES A RELATIVELY LARGER
SHARE OF BENEFITS
TAX CREDIT PROGRAMS HAVE GROWN IN IMPORTANCE
RELATIVE TO TRADITIONAL INCOME SUPPORT
PROGRAMS
TAX CREDIT “PARTICIPATION” EXCEEDS THAT OF
TRADITIONAL INCOME SUPPORT PROGRAMS
TAX CREDITS FACE TARGETING AND DELIVERY
CHALLENGES
REFUNDABLE TAX CREDITS HAVE CONTRIBUTED TO
REDUCED POVERTY RATES
RECENT POLICY CHANGES PROVIDE EXPANDED
BENEFITS
Chapter 2:
THE POTENTIAL IMPACT OF
TAX REFORM ON FARM BUSINESSES
AND RURAL HOUSEHOLDS
How Was the Study Conducted?
OBJECTIVES OF FUNDAMENTAL TAX REFORM
Simplifying the Tax System
TAXATION OF FARM INCOME UNDER PROPOSED REFORM
Most Federal Income Tax for Farm Households Is Paid on Off-
Farm Income
Farmers Realize a Greater Share of Their Income from Capital
Gains Than the Average Taxpayer
Limits on Accelerated Capital Cost Recovery Could Affect
Farmers’ Capital Purchase Decisions
Domestic Production Activities Deduction
Self-Employed Health Insurance Deduction
TAXATION OF RURAL HOUSEHOLDS
UNDER PROPOSED REFORM
Rural Homeowners Are Less Likely to Benefit from the
Mortgage Interest Deduction
Low-Income Rural Families Rely Heavily on Refundable Tax
Credits