I
make it a priority to keep in touch with Iowans and to listen to their thoughts
and concerns.
Whether
at one of my 99 county meetings or during the a match-up of Iowa State versus my
alma mater, Northern Iowa, I meet Iowans where they are and listen to what is
on their mind.
During
this past state work period, I had multiple conversations with farmers about
what is on their mind.
At
the UNI – Iowa State game, I had a conversation with Ron Heck, a farmer from Perry,
Iowa, where he talked about the concerns about President Biden’s tax plan.
Ron
followed up with an email to me, which I want to share with my colleagues on
the floor since this is a theme I’ve consistently heard across the state.
Ron
started the email by saying, “Iowa farmers have a problem with exploding land
prices, coupled with Biden's increasing death and transfer taxes.”
He
said, “A tax at death or transfer can't be paid back by younger working farm
families. Young Iowa farmers would become feudal servants to banks and
landlords from outside of the state.
There
are many cliches and articles written about this. I have seen some that don't
seem to grasp the problem.”
Then
Ron highlighted some key statistics on the lack of available Iowa farmland.
“In
Iowa, from the third quarter of 2020 through the second quarter of 2021, the
Center for Agricultural and Rural Development at Iowa State University says
181,046 acres of Iowa farmland has been available on the market.
Out
of about 30 million crop acres, this is 0.6 percent in a year. Everyone
knows that it might be 100 years before a parcel is available again, so you
need to buy it now is always said by the auctioneer.
A
Des Moines Register article from June 28, 2018, by Donnelle Eller says that
only 7 percent of Iowa farmland owners intend to sell to a non-family member.
Ron
made this point to show that public auction prices are high because of the
scarcity of available farmland. These prices should not be used for family tax-transfer
valuations for taxation.
Ron
continued with facts on the price of this farmland, “Outsiders believe the
value is there, but in fact, farm families don't want to sell, so the auction
price goes up.
Ron
said, “In August, there were forty Iowa farmland auctions with most of the
sales between $10,000 to $16,000.
Assuming
a taxable gain of $10,000 per acre, Biden's tax plan could be $4,400 per
acre.
Ron
told me that, “At a minimum, this would be a $200 per acre cash rent for 22
years to the US government, all payable in advance.”
He
added, “This is confiscation, not taxation.”
Ron
said that since the $4,400 must be paid for with after tax dollars, it would
take double this amount to pay it back. Interest charges could make the payback
period more than 50 years, just to pay the U.S. government.”
Ron
finished his email by saying, “It doesn't take much outside money to raise
havoc with Iowa farmland auctions.
“Estate
or transfer taxes will ultimately destroy Iowa's farm culture.”
Ron,
thanks for taking the time to write to me.
It’s
my job to respond to the comments and do something about it. I want to urge my
colleagues to join together and oppose changes that will impact family farmers.
Iowa
farmers feed and fuel our country and the world.
Ensuring
that the next generation of farmers are able to keep the land in their family
is in our national interest.
Biden’s
tax and spend proposals will be bad for small businesses, for farmers, and for all
Iowans.
