BTW, the IRS is looking into changing the inheritance tax in regards to farmland. And not, IMO, in a good way.
Increasing taxes in that regard will result in more siblings having to sell their family farms (or selling a greater % of it) in order to pay the increased inheritance tax.
In a steady state environment in regards to that tax, the amount of farm income siphoned off by the government is factored into the value of farmland via how much is brought into exchange on a per capita basis. A sudden jolt, if you will, in the amount of money taken out of the farming segment via a big jump in that tax will result in a jump in the amount of farmland changing hands over the next few years as more children will be forced to sell. And since there is more farmland for sale, AND the government is taking more money out the farm segment of the economy, farmland will take a substantial hit in regards to its value.
And then there is an apparently unnoticed unintended consequence; many (most?) farmers use their land as collateral on loans to finance their inputs for planting their crops in the subsequent years. A sudden drop in the value of that collateral will definitely put more farmers out of business as bankers will not endanger their bottom lines by loaning money with out sufficient collateral.
So, more farmers are out of the farm segment of the economy, and with their land now useless to them as it is insufficiently valuable to secure a loan for seed and fertilizer, it will be put up for sale. Ooops! It's not a good time to be selling farm land anyhow because the IRS just changed the inheritance tax calculation. Oh, so sad, too bad !!
Now, while this is good news for me, since I am looking to expand, some of my neighbors are going to take it in the shorts over this matter. And upon my demise, my turn comes up too.
So, while these restaurant employees are looking at pretty good odds for a raise, my neighbors at least (maybe me too if I'm not smart enough) are looking at a VERY bad couple of years to come.
So how many farmers can all the urban McDonalds employ behind their cash registers ?
Increasing taxes in that regard will result in more siblings having to sell their family farms (or selling a greater % of it) in order to pay the increased inheritance tax.
In a steady state environment in regards to that tax, the amount of farm income siphoned off by the government is factored into the value of farmland via how much is brought into exchange on a per capita basis. A sudden jolt, if you will, in the amount of money taken out of the farming segment via a big jump in that tax will result in a jump in the amount of farmland changing hands over the next few years as more children will be forced to sell. And since there is more farmland for sale, AND the government is taking more money out the farm segment of the economy, farmland will take a substantial hit in regards to its value.
And then there is an apparently unnoticed unintended consequence; many (most?) farmers use their land as collateral on loans to finance their inputs for planting their crops in the subsequent years. A sudden drop in the value of that collateral will definitely put more farmers out of business as bankers will not endanger their bottom lines by loaning money with out sufficient collateral.
So, more farmers are out of the farm segment of the economy, and with their land now useless to them as it is insufficiently valuable to secure a loan for seed and fertilizer, it will be put up for sale. Ooops! It's not a good time to be selling farm land anyhow because the IRS just changed the inheritance tax calculation. Oh, so sad, too bad !!
Now, while this is good news for me, since I am looking to expand, some of my neighbors are going to take it in the shorts over this matter. And upon my demise, my turn comes up too.
So, while these restaurant employees are looking at pretty good odds for a raise, my neighbors at least (maybe me too if I'm not smart enough) are looking at a VERY bad couple of years to come.
So how many farmers can all the urban McDonalds employ behind their cash registers ?
The granting of a pardon is an imputation of guilt, and the acceptance a confession of it.
