Do Most U.S. Farms Really Lose Money? Taxation and Farm Income Underreporting

Nigel Key

Journal of Agricultural and Applied Economics, 2019, vol. 51, issue 4, 646-663

Abstract: This article explores whether income underreporting for tax purposes can explain why the majority of U.S. farmers earn low or negative net farm income. Using 10 years of U.S. Department of Agriculture farm-level data, the extent of underreporting is estimated by exploiting the fact that farm households face an incentive to underreport farm income that varies with their reported off-farm income. Results indicate that 39% of total farm income is underreported. For large farms, the results imply a substantial discrepancy between reported and earned farm income. For small-scale operations, underreporting reduces but does not eliminate the gap between farm and off-farm wages.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Working Paper: Do Most U.S. Farms Really Lose Money? Taxation and Farm Income Underreporting (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jagaec:v:51:y:2019:i:04:p:646-663_00

Access Statistics for this article

More articles in Journal of Agricultural and Applied Economics from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().