IDEAS home Printed from https://ideas.repec.org/a/cup/jagaec/v51y2019i04p646-663_00.html
   My bibliography  Save this article

Do Most U.S. Farms Really Lose Money? Taxation and Farm Income Underreporting

Author

Listed:
  • Key, Nigel

Abstract

This article explores whether income underreporting for tax purposes can explain why the majority of U.S. farmers earn low or negative net farm income. Using 10 years of U.S. Department of Agriculture farm-level data, the extent of underreporting is estimated by exploiting the fact that farm households face an incentive to underreport farm income that varies with their reported off-farm income. Results indicate that 39% of total farm income is underreported. For large farms, the results imply a substantial discrepancy between reported and earned farm income. For small-scale operations, underreporting reduces but does not eliminate the gap between farm and off-farm wages.

Suggested Citation

  • Key, Nigel, 2019. "Do Most U.S. Farms Really Lose Money? Taxation and Farm Income Underreporting," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(4), pages 646-663, November.
    • Handle: RePEc:cup:jagaec:v:51:y:2019:i:04:p:646-663_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1074070819000269/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jagaec:v:51:y:2019:i:04:p:646-663_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/aae .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.