The huge farm bill working its way through the final stages of the House/Senate Conference Committee appears to have preserved at least a few tax provisions. In March, the conference committee had stripped out the tax provisions that had originated with the Senate Finance Committee. However, when it came time to count votes, negotiators decided that some of the tax provisions had to stay in.The farm bill can be looked at as a net tax increase, with the somewhat unusual feature for legislation in recent years of providing for more revenue-raising offsets than tax incentives. The negotiators have agreed on $1.4 billion in tax incentives and $10 billion in offsets. The figure of $1.4 billion is a significant reduction from the $2.4 billion in tax incentives originally proposed by the Senate Finance Committee.

It is this effective tax increase feature of the legislation that is one factor in drawing a veto threat from the Bush administration over the farm legislation. Conference negotiators are currently working on a cutback in farm subsidies to wealthy farmers to try to bring the administration on board with the legislation.

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