Number: RS22759
Title: Farm Legislation and Taxes in the 110th Congress
Authors: David L. Brumbaugh, Government and Finance Division 
Abstract: On July 27, 2007, the House passed its version of the omnibus 2007 farm bill (H.R. 2419). The bill's spending provisions are estimated to increase federal spending on agriculture policy above the baseline level allowed by the FY2008 budget resolution. In order to comply with House pay-as-you-go budget rules, the bill included several revenue-raising provisions, the bulk of which would be produced by a proposal to restrict the use of tax-treaty benefits by foreign firms not actually resident in a treaty country. In October, the Senate Finance Committee approved S. 2242, a bill containing a number of agriculture-related tax provisions, but also containing energy and conservation measures along with a revenue-raising proposal designed to curtail tax shelters (codification of the "economic substance" doctrine). The Senate Finance Committee bill is estimated to be approximately "revenue neutral," gaining as much new tax revenue as it loses. However, it also contains an optional new tax credit that is estimated to have the effect of reducing outlays under an existing U.S. Department of Agriculture program by $3.0 billion over five years, thus providing room for new spending in the Senate version of the farm bill without violating Senate budget rules. On December 14, the full Senate approved an omnibus farm bill (an amended version of H.R. 2419) containing the essential elements of the Finance Committee tax package.
Pages: 6
Date: January 22, 2008