After a roundtable discussion with beginning farmers in Iowa, Agriculture Secretary Tom Vilsack said their chief concern is finding land so they can set up their operations. “The continued focus on the estate tax makes no sense to me,” said Vilsack, referring to the idea, popular in the farm sector, of abolishing the estate tax.
“It’s the income tax that’s creating the barrier to access to land,” said Vilsack during a telephone news conference. He said incentives are needed to encourage landowners to sell to newcomers. Land is an expensive investment for a beginner and often is the largest asset of an established farmer. When they sell, owners face hefty tax bills because of the large increase in land values over the decades.
Farm groups often call for abolition of the estate tax to ease the transfer of land across generations. Families could be forced to break up a profitable farm in order to pay the estate tax bill, they say. Farmers take steps such as creating trusts or forming corporations to avoid estate taxes. The American Farm Bureau Federation, the largest U.S. farm group, advocates repeal of the estate tax, saying, “Our nation’s estate tax policy can be in direct conflict with the desire to preserve and protect our nation’s family-owned farms and ranches.”
Republican presidential nominee Donald Trump has proposed repeal of the estate tax, which is levied at a 40-percent rate on wealth above $10.9 million for a married couple, saying it is “just plain wrong.” The Democratic nominee, Hillary Clinton, “wants to return the estate tax to the parameters in place in 2009, when married couples received a $7 million exclusion and a 45 percent top rate,” said the Wall Street Journal. Clinton criticized Trump over the estate tax while in Cleveland, saying his family would benefit immensely from a repeal.
As part of Vilsack’s visit to Iowa, the USDA announced a “Fall Forum” series around the country to highlight top agricultural issues “and to set the stage for the next administration to continue to support a strong future for American agriculture.” Congress is expected to begin gathering information next year for drafting the next farm law in 2018.
The first forum, focusing on land tenure, will be held at the University of Arkansas later this month, said a USDA spokeswoman. It will be followed by a September session at Arizona State University on the effects of climate change on water and land use. Forums are planned in October at Colorado State University to discuss export markets and in Florida to focus on pests and diseases. Sessions also are expected on research and new technology, and on local and regional food systems.
Vilsack said the foundation for the next farm bill would be “what is the need out there,” rather than how to meet a budgetary target. “That’s the conversation we should have,” he said.
During the teleconference, Vilsack announced $17.8 million in grants, to 37 projects in 27 states and the District of Columbia, to help new and beginning farmers and ranchers. One of the largest grants, $600,000, will be used by the Southern Appalachian Highlands Conservancy, in Asheville, NC, “to deliver whole farm training, farmer-to-farmer networking and farmland access.”