The Tax Cuts and Jobs Act Would Have Lowered Average Income Tax Rates for Farm Households between 2016 and 2017

The Tax Cuts and Jobs Act (TCJA) of 2017 made significant changes, albeit temporary ones in many cases, to the Federal income tax system. ERS researchers estimated that, had the TCJA been in effect in 2016, family farm households would have faced an average effective tax rate of 13.9 percent—compared to the actual 17.2 percent effective tax rate that year. Had the TCJA been in effect in 2017, the average effective tax rate for family farm households would have been more than a percentage point lower than in 2016 (12.8 percent).