Arizona’s Senator Jeff Flake (R) released his latest report “Tax Rackets: Outlandish Loopholes to Lower Tax Liabilities.” To promote his report, Sen. Flake released a short video claiming “innocent alpacas” are being abused and used as a tax shelter. He pleads with his constituents to help him save alpacas. The senator is targeting hard working business owners, causing potential harm to an industry he should, instead, celebrate and encourage for their contributions to the economy.
“Sen. Flake’s accusations of the abuse of alpacas is disingenuous,” said Bud Synhorst, Alpaca Owners Association, Inc. executive director. “I am stunned that the senator would go on national television without all of the facts about the North American alpaca industry!”
The environmentally friendly alpaca is raised in North America for its fleece. He claims the market for fleece “never developed” in an interview on Fox & Friends. Compared to other livestock industries, alpacas are still a relatively new livestock in North America. Fleece has been a focus of alpaca owners since the industry began in the 1980s. It was not promoted nationally because there was not enough high quality fleece to support a full-blown alpaca fleece market. However, this does not mean that it was not a focus. Many people have utilized their alpaca fleece on a cottage level and still many others focused on fleece by working to breed alpacas which produce high quality, finer fleece, which is what is desired by producers. Successful alpaca owners knew the traits of the best quality of fleece and their focus was breeding animals to create top quality product.
As the national alpaca herd continues to grow, the alpaca industry, through marketing, will build a higher demand for their unique fleece and a variety of end products. Current levels of supply and demand always dictate the price of any product being sold.
The senator did not mention that the alpaca industry has been steadily growing in North America for more than 30 years. He stated that there are currently around 150,000 alpacas in North America when, in fact, there are more than 250,000. In the United States and Canada, alpaca business owners are striving to build the highest quality herd in the world. Existing strong genetics, scientific breeding programs for genetic advancement, a DNA tracked registry program and superior breeding facilities have already given the North American alpacas a reputation of being the best amongst international judges.
Sen. Flake dismissed the idea that an agricultural business is something that people desire and seek. Alpacas are a business venture that people have made a successful living from. When compared to other livestock, alpacas are a safe animal for children to work with as well – the entire family can get involved. It is a shame that during these difficult economic times, the senator cannot celebrate the fact that Americans are succeeding in a business that makes them happy.
“With his family’s agriculture background, why would he launch an attack on the North American ag industry,” questions Synhorst. “The ag industry is the backbone of America.”
The alpaca industry is, in many cases, 100% American made from start to finish. In this economic environment, employees are being hired to work on the farms, creating jobs for Americans. Alpaca owners employ builders, veterinarians, farm managers, professionals who build and maintain websites, buy hay, straw, feed, tractors, donate to pay for research conducted at universities… the list goes on. The industry contributes millions of dollars through these things in addition to more than 40 alpaca shows at facilities throughout the country. The recent National Alpaca Show, held in Denver, CO this year, contributed several hundred thousand dollars to that community alone. The upcoming Alpaca Owners Association National Fleece Conference in Sacramento, CA will do the same.
“Sen. Flake was unprepared to talk about the tax code as it relates to the alpaca industry,” said Synhorst. “He misused the facts by stating that alpacas were singled out. In quoting section 179 deductions, Sen. Flake was attacking small businesses and their capacity to deduct equipment and software. They are treated like any other livestock including cattle, hogs and sheep.”
Alpaca business owners also receive NO “special alpaca tax benefit.” They have the same deductions as any other livestock or small business owner in America. These amounts can vary by state and even local laws.
Sen. Flake also mentions the price to purchase alpacas in his interview. The structure of alpaca pricing parallels that of other livestock industries where superior breeding stock and breeding stock in general command higher prices than individuals of average quality and production animals. The latter, especially males with minor defects or inferior fleeces, are often sold cheaply or sometimes even added to a sales package at no extra cost to the buyer. Alpaca breeders, like other livestock producers, know that not all their breeding decisions result in super stars.
“Why would a U.S. Senator attack small business owners when his own report was unable to determine the cost of the deductions?” said Synhorst. “Senator Flake, after over 16 years in Washington, D.C. hasn’t apparently made a name for himself so he’s grasping at ways to gain attention and is attacking small business owners in the process.”
The alpaca industry has forged forward during tough economic times and is currently involved in development of a marketing and brand entity. The industry has taken NO government bailout money. Alpaca may not be a mainstream livestock choice within American Agriculture today and enjoy the recognition of traditional livestock, it is none the less federally recognized as livestock and continues to grow a national herd and develop.
Alpacas require minimal acreage, are gentle on the land, are environmentally friendly, and are comparatively very safe for children to work with. Talk to an alpaca owner near you. They can tell you the name of each and every animal on their farm as well as their individual personalities. Abuse certainly does not come to mind when visiting a successful alpaca business owner.