The American federal tax system is different from most national tax plans in
that it, unlike many tax systems, generally treats farmers as it does other citizens. Still, there are some distinctions in the tax treatment of farm income. All
taxable income is taxed uniformly regardless of its source, but farm income is
allowed certain tax preferences which reduce the amount of farm income that
is considered taxable. Advocates of tax uniformity have long argued that these
preferences give farmers an undue tax advantage; farm supporters have just as
steadfastly maintained that they are necessary to maintain an equitable tax
system for the agricultural sector. This article presents an exhaustive study of
this controversy and examines both federal and state and local tax burdens
for evidence of tax differentials between the farm and nonfarm sectors.
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