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Farm Bureau supports FairTax, with provisions

Stipulations include income-tax reduction; exemptions for food, farm equipment, feed

Elaine Shein, Capital Press Executive Editor 12/15/06

BEND, Ore. - The Oregon Farm Bureau took a significant step during its annual meeting, passing a resolution on Dec. 8 that said it would support a retail sales and use FairTax if it becomes federal law.

The resolution led to significant debate among the delegates, with some saying they felt it would be a better and easier tax to deal with on their farm compared with current state and federal income taxes.

Others argued that philosophically their members and the Farm Bureau have always been opposed to sales and use taxes, and they did not believe the counties they represent have had enough of an opportunity to discuss and understand the impact of a FairTax (HR25-2006).

"This is a big change. I know a lot of people, like me, have been desperately against a sales tax," said one of the delegates who lined up at the microphones. He added that the policy book has for a long time been against sales taxes.

"I don't like to just be an old-timer and afraid of change. I listened to the talk on this, and there's a lot of valuable things in it, certainly," he said, such as the elimination of the estate tax. "But it's too much for us to make a flip-flop at this point."

Zach Christensen, president of Yamhill County Farm Bureau, also encouraged delegates not to support the tax but to seek more education on it at all levels "to get people familiar with it and find out what this is going to do."

Christensen also attended a workshop explaining the FairTax during the annual meeting. "But I'm still not comfortable with it personally. I'm here representing people who don't have any idea on it, and I don't know what their feelings are."

Bob Flowers, president of the Klamath-Lake County Farm Bureaus, said he saw holes in the proposed tax, and he wanted people to take more time to look at it.

Rick Epp, president of the Douglas County Farm Bureau, said the FairTax isn't new and had been discussed in his area. "This is something we definitely have to look at." He warned people not to be like an ostrich with its head in the sand waiting for the issue to go away, because it won't.

Gary Harris, a delegate from Jefferson County, was one of the strongest advocates of the tax.

"I've been in Farm Bureau for 35 years or whatever. When this idea was brought to us three years ago, we passed it off as tax-evading. We were given a poor presentation on it, and most of us didn't understand it, and it seemed like a fly-by-night idea," he said.

However, he has now attended three different presentations on the FairTax and has read a book on it.

"You farmers are losing the ball if you drop this idea. This is tremendous for us. I'm going to leave this convention and I'm going to go home this week, and I'm going to do the farmer's shuffle. I'm going to sit at my desk and try to guess what do I need to buy, what expenses do I need to move forward, or what income I need to shift in this year and next year.

"And then I'll wait until March 1, spend 10 days before March 1, taxing over an income tax system that is onerous for me to fill out and spend all year long keeping a set of books and records so the government knows what I'm doing.

"And then I also keep track of the 74 employees I have, deposit their Social Security, deposit it four times a year, trace every one of them, send reports to the government," Harris said.

"That all goes away with this system. None of my farm agricultural inputs are sales-taxed. I'll be able to export wheat and get a better deal. I fear America is having more people who are have-nots with a hand out that those of us who are producers pay a share of government for those people.

"We have to get back a system where everyone has a share or take in the taxation of running government," he said. Harris' remarks drew loud applause from the other delegates.

The final policy adopted by the House of Delegates stressed it was not an endorsement of the FairTax, but would support it if it had specific provisions to protect farmers and ranchers.

These included that the state and federal income taxes would need to be repealed first; that the FairTax be revenue-neutral, broad-based and hold individuals and families from the tax at 100 percent of the poverty level; and that it exempts capital gains tax, estate tax, all business expenses and real and personal property.

Also, any rate increased would need a two-thirds majority of both houses.

The delegates added that any stand-alone Oregon state sales tax must meet other provisions: the rate and agricultural exemptions are established in the constitution; money collected from a state sales tax is only to be used to reduce the state income tax; prescription drugs, food purchased for home preparation, livestock, feed, seed, pesticides, processing or cleaning of agricultural products, feeds for agricultural business services performed, farm equipment, parts and repairs for farm equipment and any item that is consumed or used in the production of, or becomes a part of, an agricultural product shall be constitutionally exempt from the tax.

They also added that no county, city, district or other municipal corporation or politics subdivision may impose a general retail "sales and use tax."
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