The goverment gives tax breaks to land used for agricultural purposes.  Is it a good idea for the government to do this?

Asked on by soman2006

1 Answer | Add Yours

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

Economically speaking, this is not a good idea.  Economists argue that subsidies distort markets and are therefore bad.  When such tax breaks are given, it encourages resources to be put towards farming when, from an economic standpoint, they could be put to a more profitable use.  To this way of thinking, the market should be allowed to operate without government interference in the form of things like tax breaks for certain kinds of economic activity.

From a political point of view, such tax breaks can be a good idea.  Many Americans believe that it is important for our country to have farms even if they need to be propped up by the government.  According to this argument, the tax breaks are necessary to ensure that farming will always be a profitable thing for some Americans to do.

We’ve answered 319,816 questions. We can answer yours, too.

Ask a question