Brockett’s Ag Advice ML By John E. Brocket! Farm Management Agent Wgt Lewistown Extension Office Balancing the Budget On The Backs of Babes Most people have heard they all figured the rich would something about the vaunted new finally be forced to pay their own tax bill as proposed by the Senate fair share. Right? Finance Committee. Some of you One item that few media people have been concerned how you and even fewer politicians have would fare under its rules. Many of mentioned is that all dependent you have heard about the con- children with bank accounts may troversy over the IRA. A few have now be subject to filing a federal expressed concern about the tax return. If a dependent child (no discontinuance of such items as matter what age) has interest plus “income averaging”, “long term dividends plus capital gains in capital gains preference,” “sales excess of $lOO, that child will have tax use for itemizing,” and “in- to file a return and pay a tax of 15 vestment credit”. Few middle percent of that amount. Dependent class people have actually com-, children will not be allowed to plained about any of these because' claim a personal exemption or use BEST BUY of the YEAR • 6" Steel Main Beam • 2” Vertical Tubing Drilled so that the 1" Horizontal tubing extends Full Length of Wagon • Front-Side and Rear Loading and Unloading • 2xB Pressure Treated Lumber Floor • 2x6 Oak Cross Beams • Beds are 8’ wide, available in 16,18 or 21’ lengths. Racks are 90” high. • NEW FEATURE: 6” Channel across back for pushing wagon without damaging bed. FOR FURTHER INFORMATION. CALL YOUR LOCAL DEALER: LOST CREEK IMPLEMENT Oakland Mill, PA 717-463-2161 MELROSE FARM SERVICE Greencastle, PA 717-597-3136 KELLER BROS. Lebanon, PA 717-949-6501 DUNKLE & GREIB Mill Hall, PA 717-726-3115 WALTER G. COALE, INC. Churchville, MD 301-734-7722 CLW MANUFACTURING, INC. TOBIAS EQUIPMENT INC. Halifax, PA 717-362-3132 NORTHEAST DISTRIBUTING West Clifford, Pa. 717-222-9020 VALLEY IMPLEMENT SALES Harrisonburg, VA 703-434-9961 CHAMBERSBURG FARM SUPPLY Chambersburg, PA 717-264-3533 Manufactured By R.D. #2, Box 8 Newburg, Pa. 17240 717-423-6794 the standard deduction for so called unearned income (interest, dividends, rent, capital gains). This means they will be considered to be a different class of citizens than adults. How much will this affect the rich? The answer is, probably not much, if at all. Why? The rich will simply move all of their children’s money into tax free bonds, trusts, or overseas. Who will bear the brunt of this rule? Primarily the middle class family that is in terested in teaching its children to save for education, a future business, or a start up in the adult world. In the past, families with children who had a bank account earning interest did not worry about the Federal income tax for those children. If the new tax bill passes with this provision intact, there will be a lot of children who will be receiving tax bills from Uncle Sam. As I said many months ago, whenever the people in Congress say they are going to simplify the tax laws, I shudder, because I know that the sim plification will usually wind up causing most middle class people extra time, additional effort, and OXFORD GREENLINE, INC. Oxford, PA 215-932-2753 PAUL SHOVER’S, INC. Loysville, PA 717-789-3117 A.B.C. GROFF New Holland, PA 717-394-4731 CARLISLE FARM SERVICE Carlisle, PA 77-243-4419 CLARK’S FARM SUPPLY Williamsport, PA 717-494-0060 more money. This one will be no different. For those of you with dependent parents, it appears as though the same ride will be in effect. The proposed law simply says “the personal exemption is not allowed to an individual who is eligible to be claimed as a dependent on another taxpayer’s return.” Do not confuse this rule with another one along the same line. The second rule says that interest income (or any other unearned income) from a gift given by parents to children under age 14 will be taxed as the parent’s rate. According to some experts this would include all interest or other earnings on custodial and trustee accounts, with a parent as custodian or trustee, whether the money was gifted by the parents or not. Alternative Maximum Tax Recently I read an article in a local paper that stated em phatically “Alternative Minimum Tax” only affects the very rich. That should make the older oounle Christmas Tree Growers to Discuss HARRISBURG - The Penn sylvania Christmas Tree Growers’ Association is calling for a referendum on a marketing program to provide funds for research and promotional ac tivities. The proposed assessment of 10 cents per tree on all trees har- KATOLIGHT! THE PIONEER IN BRUSHLESS P.T.O. ALTERNATORS!! YEARS OF ' £3 EXPERIENCE HAVE GONE INTO THE / w» s . IX ADVANCED DESIGN OF THESE \ \ ' POWERFUL BRUSHLESS * ALTERNATORS. THE RESULT IS THE ** jJjV UNIQUE COMBINATION 0F... ) * 300% Surge Capacity: For Superior motor starting capabilities * Totally Brushless'Design: For greater reliability and more positive voltage build-up after long periods of idleness Momentary Surge Watts Model NO Watts 7b 000 25iR: 25 000 35LR1 105 000 35 000 135 000 45LR1 45 000 165 000 55LR1 85LR1 55 000 255 000 85 000 USED UNITS ALSO IN STOCK MARTIN MACHINERY Distributor for DE. MD, NJ & PA Lancaster Farming Saturday, July 5,1986-Dll who sold their farm at a $60,000 profit smile a bit. Actually “Alternative Minimum Tax” can affect anyone who has income (before deductions or exemptions) over $40,000 (for married people filing jointly) from any source. That includes the total gain from a capital sale, not just the allowable 40 percent. The new tax law promises to make this more in clusive. That may mean a lower threshold or may mean more items will be covered. It will mean that, according to the new law, the middle income people will continue to get the short end of the stick when it comes to paying taxes. Incorporation Under The New Tax Law Incorporation of small businesses will look more practical under the new law, especially if the business is fairly profitable. Tax rates for businesses appear to break at a higher rate than for individuals. Once the laws are in place, there will have to be a lot of study to determine the most favorable practice. Marketing Program vested and sold would provide an annual fund of $150,000 for marketing activities. The program would be guided by an advisory board of tree producers. A public hearing on the proposal will be held at 11 a.m., July 21, in Room 309 of the Agriculture Building in Harrisburg. Mode! Selection Chart Volts Minimum Required HP 120/240 120'240 120 240 120 240 120 240 SALES - SERVICE • RENTALS P.O. Box 35, Martindale, Pa. 17549 24 HR. EMERGENCY SERVICE BY RADIO DISPATCHED SERVICE PERSONNEL Phase Wire C 8 Amps Net lbs
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