As the nation at large keeps a collective eye upon falling stock prices on Wall Street, merchants on Main Street are taking stock of consumer confidence and spending behavior. As Iowa’s senior U.S. senator, I make it my job to keep tabs on the public’s pulse as closely as I watch over the public’s purse in Washington. Financial analysts and economic statisticians make a living telling brokerage houses and investors what to expect. With cable television and the Internet, Americans can avail themselves of market talk 24 hours a day 7 days a week. Meanwhile, suburban store fronts, farm retailers, home builders and small business owners across America rely on consumers’ confidence and their take-home pay to keep things rolling on Main Street.
The United States experienced record economic growth during the 1990s. Even Washington said good-bye to a 30-year streak of annual spending deficits. Now the national debate is focused on how to keep the good times going in the first decade of the 21st century. But not every economic sector or region in the country was along for the joy ride in the last decade. Record low commodity prices kept the farm economic chain quite a few links shy of prosperity. And while rural America has diversified its economy beyond the silos and smokestacks that fed its economic engine for a century and more, the agricultural economy still serves as its bread and butter.
As chairman of the Senate Finance Committee, I called a congressional hearing in March to examine the challenges facing Main Street and identify solutions to address the hardships facing rural America. As I see it, one of the roadblocks impeding economic growth is high taxes. Like unwelcome weeds in a soybean field, high taxes can choke economic activity and kill opportunities for productivity.
The United States today bears a record tax burden, with family farmers and small business owners paying a significant share. As the economic and social anchor in many small towns and rural communities across the country, the well-being of family farms and small businesses is a key measurement used to gauge a region’s overall economic vitality. Because many of these taxpayers file as individuals, their tax bracket could be as high as 39.6 percent, rather than the 15-35 percent bracket applied to corporations.
Washington can clear the path to long-term economic growth and help shape consumer behavior by implementing marginal tax rate reductions. The president’s plan to enact an across-the-board rate reduction would increase a family’s take-home pay and spur economic activity across-the-board, by enhancing consumers’ purchasing power and affording entrepreneurs the opportunity to get their business off the ground and create new jobs.
In addition to marginal rate tax relief, other tax changes can help Main Street. I have introduced a tax package designed specifically to empower those working hard to make ends meet in rural America. Called the 'Tax Empowerment and Relief for Farmers and Fishermen Act,' (TERFF) my plan includes tax-free savings accounts that would allow farmers to put money away when there's actual income. These rainy day accounts would create a cushion for farmers, whose incomes can fluctuate greatly from year to year, to use these accounts as a risk management tool. What’s more, an Iowa banker testified that these accounts would enhance the squeezed lending pool available to issue loans to homeowners, small businesses and farmers in local communities across Iowa.
The TERFF legislation also would expand 'aggie bonds;' reverse unfair IRS decisions on the self-employment tax for farmers; provide a tax deduction for farmers and restaurants to donate to food banks; and offer income averaging for farmers who are caught in the Alternative Minimum Tax.
As a leading advocate for rural America in the United States Senate, I will continue to advance public policy that benefits Main Street and American agriculture. Most new jobs come from small business. And although some of my colleagues and Washington insiders choose to forget, our nation's safe, affordable and abundant food supply depends on family farmers.
Although now rendered largely obsolete, many Iowans know first hand what it means to 'walk the beans' to clear the fields from burdensome weeds. It’s hard, yet rewarding work that pays off in the end. In Washington, I’m busy walking through the onerous tax code and working to steer a relief package through the legislative fields in Congress. Uprooting high taxes on farmers and small business owners should brighten the economic future for Main Street by clearing the way for growth and productivity.