Food for thought: back door taxes on food producers

When we think about the taxes we pay, the first to come to mind are generally the obvious taxes: sales, property, income. But what about the “back door” taxes – millions of dollars that are generated each year that generally don't garner much attention from the average taxpayer?

The 1985 Farm Bill established the national Beef Checkoff Program, leading the way to establishing various state beef councils including one right here in Kansas. In order to comply with the national Beef Promotion and Research Act, all producers selling cattle or calves for any reason must pay $1 per head to support, well, beef promotion and research.

The name “checkoff” gives the impression that this is a voluntary act, but it certainly is not. This non-voluntary assessment (let’s face it, it’s a tax – what else do you call a government mandated non-voluntary fee?) applies at various collection points including auction markets, feedyards, dealers, other producers, auctioneers, clerking services, banks, packers and other entities. And this applies each time a cow/calf goes through a collection point – surely numerous times for each head of cattle.

In Kansas, 85 cents on the dollar are sent to the national beef checkoff program, to support national beef promotion efforts. According to the Kansas Beef Council’s website, the beef checkoff generates $10 million annually in Kansas, and about $80 million annually nationwide.

Consider for a moment the number of industry associations there are that promote various food products – dairy, pork, poultry and eggs, various crops. It does make one wonder how much of our food costs have to cover these back door taxes forced on our producers.