Tax Policy and U.S. Agriculture: A General Equilibrium Analysis

This article emloys a computable general equilibrium model to analyze the effects of eliminating farm and food tax preferences in 1977. Tax differentials on capital income, labor payments, and production and sales taxes are each examined. Results indicate that these combined preferences lowered food costs by about $@@‐@@4.5 billion while enhancing after‐tax returns to farm land, labor, and capital. The associated general equilibrium tax expenditure is estimated to have been between $@@‐@@5.5 and $@@‐@@6.6 billion.