To protect U.S. farmland, the government would collect a 60-percent excise tax on purchases by foreign adversaries — citizens and companies from China, Russia, Iran, North Korea, Cuba and Venezuela — under legislation approved by the House Ways and Means Committee on Tuesday. The provision was wrapped into a broader package that would repeal many of the green energy incentives that were created by the climate, health and tax bill last summer.
The bill, approved on a party-line vote of 24-18, now goes to the House floor. Committee chairman Jason Smith of Missouri and fellow Republican Rep. Beth Van Duyne of Texas unveiled the farmland tax proposal last week. “China is beginning to settle in our backyard,” said Smith. Legislative interest in farmland ownership has risen along with the rise in Sino-U.S. tensions.
“This provision would prevent undisclosed purchases of American farm and ranch land in connection with a 60-percent excise tax imposed on the ‘country of concern’ buyers,” said Van Duyne during a day-long debate over the tax package. “This tax is four times the level of the withholding tax that currently applies (to such sales). By protecting our agricultural land, we will increase our food and economic security.”
California Rep. Judy Chu, a Democrat, said the legislation, the latest attempt to restrict ownership of farmland to Americans and U.S. allies, “effectively encourages discrimination against our (minority) communities” and was far out of proportion to the comparatively small portion of farmland owned by foreigners. “I am particularly concerned about racial profiling, especially during a time when the incidence of hate crimes committed against Asian Americans has skyrocketed.”
The provision would prevent Cuban and Venezuelan refugees from buying farmland — groups that were unlikely to be working in league with their former governments, said Chu in suggesting the 60-percent tax should apply only to companies based in the targeted countries.
Foreign entities own 40.8 million acres of U.S. agricultural land, or 3.1 percent of the privately owned land in the nation, according to USDA data. Half of the foreign-owned land is forests. Canada accounts for nearly a third of the foreign-owned land. China holds 384,000 acres of U.S. agricultural land, or 0.9 percent of foreign-owned land. There are more than 893 million acres of land in farms.
There are no restrictions in federal law on foreign ownership of U.S. agricultural land, although ownership must be reported to the USDA. Fourteen states restrict foreign ownership, said the Congressional Research Service early this year.
The Smith-Van Duyne legislation would apply to citizens of and entities based in China, Russia, Iran, North Korea, Cuba, and Venezuela, as well as “any country the government of which is engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or the security and safety of United States persons.” An excise tax ranging from 10 to 50 percent would be levied on purchases by publicly traded companies that are no more than half-owned by “disqualified” persons.