I make it a priority to stay in touch with the Iowans and listen to their thoughts and concerns.
Whether it’s at one of my 99 county meetings or a game between Iowa State and my alma mater, northern Iowa, I meet Iowans wherever they are and listen to what they think.
During this last period of state work, I had several conversations with farmers about what they were thinking.
During the UNI – Iowa State game, I had a conversation with Ron Heck, a farmer from Perry, Iowa, where he spoke about concerns about President Biden’s tax plan.
Ron sent me an email, which I want to share with my colleagues as it’s a theme I’ve heard constantly across the state.
Ron began the email by saying, “Farmers in Iowa have a problem with the explosion in land prices, coupled with the increase in Biden’s death and transfer taxes.”
He said: “A death tax or transfer cannot be refunded by young working farm families. Young farmers in Iowa would become feudal servants of banks and out-of-state landlords.
There are many clichés and articles written on this subject. I’ve seen some who don’t seem to understand the problem.
Next, Ron pointed out some key statistics about the lack of available farmland in Iowa.
“In Iowa, from the third quarter of 2020 to the second quarter of 2021, the Center for Agricultural and Rural Development at Iowa State University reported that 181,046 acres of farmland in Iowa was available in the market.
Of about 30 million acres cultivated, that’s 0.6 percent in a year. Everyone knows that it may be 100 years before a package becomes available again, so you should buy it now is always said by the auctioneer.
A June 28, 2018 Des Moines Register article by Donnelle Eller indicates that only 7 percent of farmland owners in Iowa intend to sell to a non-family member.
Ron made this point to show that public auction prices are high due to the scarcity of available farmland. These prices should not be used for Family Tax Transfer Assessments for Taxation.
Ron continued with facts about the price of this farmland: “Foreigners 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 farmland auctions in Iowa, with most sales ranging between $ 10,000 and $ 16,000.
Assuming a taxable gain of $ 10,000 per acre, Biden’s tax plan could be $ 4,400 per acre.
Ron told me, “At a minimum, that would be $ 200 an 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 has to be paid with after-tax dollars, it would take double that amount to pay it back. The interest charges could make the payback period over 50 years just to pay the US government. “
Ron ended his email by saying, “It doesn’t take a lot of outside money to wreak havoc with the Iowa farmland auctions.
“Inheritance or transfer tax will eventually destroy the agricultural culture of Iowa.”
Ron, thank you for taking the time to write to me.
It’s my job to respond to comments and do something about it. I want to urge my colleagues to unite and oppose the changes that will impact family farmers.
The farmers of Iowa feed and feed our country and the world.
Ensuring that the next generation of farmers can keep the land in their families is in our national interest.
Biden’s tax and spending proposals will be bad for small businesses, for farmers, and for all Iowans.
Note: This opinion piece is a transcript of a speech that U.S. Senator Chuck Grassley, R-Iowa, delivered to the U.S. Senate on Wednesday, September 22, 2021.