As we inch closer to Iowa’s first in the nation caucuses, we hear more and more from candidates about what they would change if they are elected. A few of the contenders for the Democratic nomination have been proposing higher taxes on those who they categorize as “rich” and “super-rich”. These taxes would be used to pay for new healthcare and childcare initiatives, but what would it mean for farmers who are considered, “asset rich” and “cash poor”?
There have been reports that financial planners are urging many of their clients to transfer money and assets to their children. Some of the more wealthy are even considering renouncing their citizenship and leaving the country. Farmers who own their land and the kids who would face the possibility of higher estate taxes, don’t have the option of taking their assets and moving.
American Farm Bureau tax adviser Pat Wolff says any roll-back of estate tax exemptions could put farmers and their descendants at a huge financial risk.
There is also the question of what would happen because of a reversal on pass-through income laws. These are key points for farmers who file returns as individuals and not corporations. Let us also not forget capital gains taxes for selling land and breeding livestock.
The proposals being raised during the campaign are not finalized with a candidate’s election. These still have to be proposed, debated, compromised on, and passed through Congress before they become law. However, being an informed citizen means you take the time to research the proposals made. These are just some of the topics that farmers will likely be looking at as they research their voting decisions for 2020.