A relatively new proposal for a tax system that imposes taxes where a good or service is consumed rather than where it is produced could be a mixed bag for farmers and ranchers. Under the system, known as the border adjustability tax, U.S. exports, including the 25 percent of farm and ranch goods sold overseas, would cost less, making them more appealing to foreign buyers. On the flip side, products imported into the U.S., like many of the inputs farmers rely on, would cost more.
“The border adjustability tax would ultimately make all of the products U.S. farmers and ranchers send overseas 20 percent less expensive. That’s a big plus for any highly exported commodity,” explained Pat Wolff, AFBF’s tax specialist.