Table 2.  Computation of Net Farm Income, Income Taxes, and Self-Employment Taxes Under Current Tax Provisions
          For a Representative Farm.
______________________________________________________________________________________________________________

                                       1996     1997         1998       1999       2000       2001     2002
______________________________________________________________________________________________________________

Summary of Gross Receipts and Expenses

Farm Receipts
  Sales of Livestock and Crops       473901     457085     419116     449562     478630     466063     442881
  Ag. Program Payments                13820      18861      20266      19530      17845      14362      13928
  Other Income                            0          0          0          0          0          0          0
    Gross Income                     487721     475946     439382     469092     496474     480425     456808

Farm Expenses
  Production Expenses                177590     178081     177508     177799     179757     183079     185132
  Fixed Expenses                     149968     152559     155450     158545     162104     165637     168756
 Depreciation                        41003      44512       23428      51313      81602      89053      89105
  Transition Depreciation             -----      -----      -----      -----      -----      -----      -----
  All Interest                        41505      39086      39407      38095      44386      56664      56103
  Total Expenses                     410067     414238     395793     425754     467850     494433     499097
Net Farm Profit or Loss               77654      61708      43589      43338      28624     -14008     -42289



Calculation of Income Taxes
  Net Farm Profit or Loss             77654      61708      43589      43338      28624     -14008     -42289
  - Half of Self-Employment Tax        4916       4360       3079       3062       2022          0          0
  = Adjusted Gross Income             72738      57349      40509      40276      26602     -14008     -42289
  - Personal Exemption                10200      10400      10600      10800      11000      11200      11400
  - Standard Deduction                 6700       6800       6900       7000       7100       7200       7300
  - Operating Loss Carry Forward          0          0          0          0          0          0      14008
  = Taxable Income                    55838      40149      23009      22476       8502          0          0
  Implied Marginal Tax Rate            0.19       0.15       0.15       0.15       0.15       0.15       0.15
Taxes if Regular Calculations         10422       6022       3451       3371       1275          0          0
Alternative Minimum Tax (AMT)          6024       2912          0          0          0          0          0
Federal Income Tax is the maximum of:
  AMT or Regular Calculations         10422       6022       3451       3371       1275          0          0
  - Earned Income Credit                  0          0          0          0        237          0          0
Net Accrued Federal Income Taxes      10422       6022       3451       3371       1038          0          0

Carry over Deductions                 -----      -----      -----      -----      -----      -----      -----



Calculation of Self-Employment and Medicare Taxes
Net Farm Income                       77654      61708      43589      43338      28624     -14008     -42289
  * Percent of Income Subject to Tax 0.9235     0.9235     0.9235     0.9235     0.9235     0.9235     0.9235
Income Subject to S-E and Medicare    71713      56987      40254      40023      26434          0          0
Maximum Income Subject to S-E Tax     62526      63776      65052      66353      67680      69033      70414
Income Used for S-E Tax               62526      56987      40254      40023      26434          0          0
  * Self-Employment Tax Rate          0.124      0.124      0.124      0.124      0.124      0.124      0.124
  = Accrued Self Employment  Taxes     7753       7066       4992       4963       3278          0          0

Income Used for Medicare Tax          71713      56987      40254      40023      26434          0          0
  * Medicare Tax Rate                 0.029      0.029      0.029      0.029      0.029      0.029      0.029
  = Accrued Medicare Taxes             2080       1653       1167       1161        767          0          0

Total Employment Taxes                 9833       8719       6159       6123       4044          0          0

TOTAL TAXES ACCRUED                   20255      14741       9610       9494       5082          0          0
______________________________________________________________________________________________________________




Table 3.  Computation of Net Farm Income, Income Taxes, and Self-Employment Taxes Under The Alternative
          Flat Tax Provisions For a Representative Farm.
______________________________________________________________________________________________________________

                                       1996       1997       1998       1999       2000       2001       2002
______________________________________________________________________________________________________________

Summary of Gross Receipts and Expenses

Farm Receipts
  Sales of Livestock and Crops       473901     457085     419116     449562     478630     466063     442881
  Ag. Program Payments                13820      18861      20266      19530      17845      14362      13928
  Other Income                            0          0          0          0          0          0          0
    Gross Income                     487721     475946     439382     469092     496474     480425     456808

Farm Expenses
  Production Expenses                177590     178081     177508     177799     179757     183079     185132
  Fixed Expenses                     149968     152559     155450     158545     162104     165637     168756
  Capital Expensing                   71755      41367          0     121476     246717     119957     136876
  Transition Depreciation             51119          0          0          0          0          0          0
  All Interest                        -----      -----      -----      -----      -----      -----      -----
  Total Expenses                     450432     372007     332958     457820     588578     468673     490764
Net Farm Profit or Loss               37289     103939     106424      11272     -92104      11752     -33956



Calculation of Income Taxes
Net Farm Profit or Loss               37289     103939     106424      11272     -92104      11752     -33956
  - Half of Self-Employment Tax       -----      -----      -----      -----      -----      -----      -----
  = Adjusted Gross Income             37289     103939     106424      11272     -92104      11752     -33956
  - Personal Exemptions               10000      10180      10343      10519      10908      11261      11529
  - Family allowance                  25000      25451      25857      26299      27271      28151      28822
  - Carry in Deductions                   0          0          0          0      26570     163128     198418
  = Taxable Income                     2289      68308      70224     -25546    -156853    -190788    -272725
  * Flat Tax Rate                      0.18       0.18       0.18       0.18       0.18       0.18       0.18
  = Accrued Federal Income Taxes        412      12295      12640          0          0          0          0
Alternative Minimum Tax (AMT)         -----      -----      -----      -----      -----      -----      -----

Federal Income Taxes                    412      12295      12640          0          0          0          0
  - Earned Income Credit              -----      -----      -----      -----      -----      -----      -----
Net Accrued Federal Income Tax          412      12295      12640          0          0          0          0

Carry over Deductions                     0          0          0     -25546    -156853    -190788    -272725



Calculation of Self-Employment and Medicare Taxes
Net Farm Income                       37289     103939     106424      11272     -92104      11752     -33956
  * Percent of Income Subject to Tax 0.9235     0.9235     0.9235     0.9235     0.9235     0.9235     0.9235
Income Subject to S-E and Medicare    34436      95988      98283      10410          0      10853          0
Maximum Income Subject to S-E Tax     62526      63776      65052      66353      67680      69033      70414
Income Used for S-E Tax               34436      63776      65052      10410          0      10853          0
  * Self-Employment Tax Rate          0.124      0.124      0.124      0.124      0.124      0.124      0.124
  = Accrued Self Employment  Taxes     4270       7908       8066       1291          0       1346          0

Income Used for Medicare Tax          34436      95988      98283      10410          0      10853          0
  * Medicare Tax Rate                 0.029      0.029      0.029      0.029      0.029      0.029      0.029
  = Accrued Medicare Taxes              999       2784       2850        302          0        315          0

Total Employment Taxes                 5269      10692      10917       1593          0       1661          0

TOTAL TAXES ACCRUED                    5681      22987      23557       1593          0       1661          0
______________________________________________________________________________________________________________