Letter from Langdon: Death, Taxes, and Farming
When it comes to taxes, farmers can’t win for losing.
No matter who or where you are, effective communication is a must. I learned that from my parents, who often used one-liner idioms to illustrate a point or educate me while growing up on the farm. After watching the presidential debates, one in particular comes to mind.
People who live in glass houses shouldn’t throw stones.
Speaking as a farmer I take exception to repeated promises by politicians that their number one concern lies with cutting taxes. Promises for better more efficient government always lead to the one about taxes. But I’ve learned never to count chickens before they’re hatched. That’s because adding insult to injury, after all these years and empty political promises, I’m paying more taxes than ever.
And some very notable wealthy people seem to pay little or none.
How can something so bad be so good? Some clouds have a silver lining. It’s like Mr. Jackson, the Administrator at the Farmers Home Administration (the lender of last resort for money-stressed farmers like me) in town once pointed out — “I have borrowers come in here and say ‘the best thing just happened to me. I just talked to my accountant and I don’t have to pay any taxes’. And I say that’s terrible! If you aren’t paying any taxes you aren’t making any money!”
I wish he could tell that to Donald Trump.
Farmers are the ORIGINAL small businessmen and women of America. After all, we came over on the Mayflower. But we can’t win for losing. Every time a farmer starts to get ahead, the government takes a big chunk of what he thought he had.
While many people earn much more than family farmers by getting a good salary in town, they get the wool pulled over their eyes because they never actually see the taxes they pay — they’re deducted before their paycheck is written. At the end of the year, all those wage earners and salaried people who have interest-free subsidized government by overpaying all year long are suddenly rewarded with a refund of their own money.
Payroll deductions and “take home pay” are nothing less than a stroke of government genius.
We don’t pay withholding. But farmers write lots of checks for things in addition to taxes, like seeds, feed, fertilizer, and pesticides. We buy machines and trucks, and fuel to power them. We spend tons more than we get. And we pay taxes on a lot of that. That’s because here in my County and all the other rural counties in Missouri, farm real estate and property tax pays for local education, roads, and law enforcement.
In all those rural counties, farmers are the biggest of the big where property and taxes are concerned.
So every time a politician in Jefferson City or Washington DC finds a way to withdraw wealthy person tax funded support for traditional government responsibilities like education, the burden falls back onto people like me, because we’re already paying about half the cost of local education through property taxes. As that burden grows, farmers have no choice but to keep on giving. Thanks to laws like we have now for annual reassessment, as land and machinery values have gone up, our taxes have too. Here in Missouri, its a blessing in disguise for rural schools, otherwise small towns like mine might have lost their schools altogether.
Rural economic development is one way farmers hope to spread the local tax load. But it has become the custom for every new business looking to establish or relocate in rural Missouri to ask for local tax abatement. In other words they make it a rule that of they come here they wont be subject to the same local taxes other businesses and farms pay and have paid for generations. Sometimes they even ask for and get a development grant funded by local sales taxes.
That’s throwing the baby out with the bathwater.
Sales taxes are another way we’re paying more than ever. Small communities use them for essentials they can’t pay for any other way, like water or sewer, sheltered workshops…conservation. It’s gotten so small communities pay local and state sales taxes as large as bigger cities have.
They’re damned if they do and damned if they don’t.
Developers and industry get the best of both worlds but for rural taxpayers like me it’s putting all our eggs in one basket.
You can’t judge a book by its cover. Farmers look rich, but much of the land we own had been passed down for generations. One of the few tax cuts we’ve actually gotten is to the inheritance tax. Congress still talks about doing away with it altogether, but if they do, they’d be cutting our nose off to spite our face. The only people that would help would be the VERY wealthy. Most farmers don’t qualify for that label, and would never use the maximum allowable deduction we have now. But even small farmers find that
when they try to retire by selling off assets, taxes on those cost an arm and a leg. That’s because we pay capital gains on our land and machinery. Then the gain is taxed again as income.
What we thought we had for retirement evaporates at the drop of a hat.
If tax-cutting crusaders get the nod in November, we’d better keep something back for a rainy day. They never seem to cut the mustard.
That’s because the only things certain in life are death and taxes.
As for how I’ll vote come Election Day, I guess I’ll cross that bridge when I come to it.
But I think my folks might say, “Fool me once shame on you — fool me twice shame on me.”
Richard Oswald is a fifth-generation farmer and president of the Missouri Farmers Union.