Tax credit would help farmers and laborers, Bureau asserts

Farmer Tax Credit

POLK COUNTY -- Oregon Representatives Jeff Kropf and Mike Schaufler, at the behest of the Oregon Agricultural Alliance, a lobbying group for Oregon farmers, have sponsored a bill to for a new tax credit for farmers.

House Bill 2597 would create a labor cost tax credit of 35 cents for every hour of paid labor.

If a farm employee works 40 hours in a week, the farmer who employs him will earn $14 in tax credits.

If a farmer has no tax liability for the year he would be able to carry his credits forward for up to 5 years, or he can sell them to another farmer or business.

This could add up to a sizeable value at the end of the year, the bill's sponsors said.

"It not only helps the farmer financially, it also helps the farmer keep more people employed. It also helps the farm worker because they get their full wage," Oregon Farm Bureau lobbyist Don Schellenberg said.

Opponents worry about the amount of tax revenue that will be lost to the state if the tax credit becomes law. It would be tax revenue that goes to fund various social programs for the poor, they say.

But Schellenberg believes those social programs would be better augmented by providing more wages and jobs.

"If you don't allow it (the tax credit), farm workers are going to lose wages or they are going to lose jobs. We feel that this would provide the same social benefits as the tax revenue would, just in a different way," Schellenberg said.

Schellenberg and his associates have in the past attempted to alleviate the financial pressures on farmers by getting the minimum wage requirements lowered.

Oregon's minimum wage is $2 higher than the federal minimum wage, but still falls below the federal poverty level.

Because of that, labor groups have adamantly opposed previous minimum wage reduction attempts.

Schellenberg hopes those labor groups will be more receptive to a tax credit for farmers, which will give laborers their full wage but will still give farmers relief.

"The minimum wage issue is particularly a problem for farmers, because they can't pass the cost increase onto their consumers. We buy retail and sell wholesale. The difference between us and the store at the mall is that they can raise their prices. We can't," Schellenberg said.

Advocates hope to see House Bill 2597 moved on to the Revenue Committee within the next two weeks.

For more Information: Oregon Farm Bureau 503-399-1701 or (click on bills and laws, then 2005 regular session to find a copy of the bill).


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