| This dissertation places the debate to replace the current federal income tax system with a consumption-based tax system into a broader context about consumption versus income-base tax systems, and examines the impacts of two consumption tax proposals, the FT and the NRST regimes, in comparison to the Pre-2001 Tax Code. A stochastic multi-year farm-level simulation approach is used to evaluate the level and the variability of the federal income taxes that Central Illinois crop farms would pay, and the level and the variability of after-tax net incomes that Central Illinois crop farmers would generate across the three tax schemes.;The model contains two components. The first describes the farm inputs, assets, key assumptions, liabilities, loans, and depreciation. The second contains the output variables, which come from the balance sheets, income statement, statement of cash flows, and the statement of owner equity.;On average, the probability of generating higher incomes for crop farm simulated in this study is the highest when crop share increases from 20% to 50%, and when cash rent decreases from 80% to 50% (Scenario ;Regarding the equivalent tax revenue, overall, there is no specific income level to which crop farm would be indifferent across tax codes. The study suggests that future research should empirically explore the effects on interest rates, savings, and investments due to tax reforms at farm levels. |
