The American Farm Bureau Federation (AFBF) is pleased that the House passed H.R. 674, to repeal the 3 percent withholding tax, as already passed by the Senate. The resounding vote of 422-0 demonstrates that Americans have had enough of extraneous taxes.

Bob Stallman, AFBF president, had the following statement: “Without passage of this important legislation, the new 3 percent withholding tax, which was scheduled to begin in 2013, would have unnecessarily hit farmers hard in the pocketbook. The tax would have been withheld from many (USDA) payments, such as dairy support and conservation programs.

“Farm profitability and tax liability fluctuate greatly from year to year due to weather and markets, but taxes would have been withheld regardless.  For agricultural operations that ended the year without owing taxes, the withholding would have amounted to an interest-free loan to the government. Reducing farm revenue by 3 percent of government payments could have created cash flow problems and made it harder for farmers to purchase the supplies they need.

“The tax would also have applied to Medicare payments.  Because rural medical facilities and doctors see a higher percentage of Medicare patients, it would have been harder to maintain rural health facilities and to attract doctors to rural areas.

“The bill will now head to the president for his expected signature.”