A24—Lancaster Farming, Saturday, February 2,1980
Farmer labels property taxes inequitable
ERIE Jesse Erickson, a
grape grower arid member
of the State Grange
Legislative Committee
slammed the state property
tax in a hearing held Wed
nesday.
The hearing, devoted to
agriculture, was one of
several held around the state
on different aspects of state
industry. The farm session
was held in Erie.
Erickson outlined the
Grange’s position on
property taxes, the state
capitoi stock tax, and
inheritance taxes.
“Agriculture is a
profession, which requires
huge capital outlays for
property, equipment,
livestock, feeds, and fer
tilizer.
“Few farmers get rich
from farming. Slender profit
margins are the rule, these
Farm Bureau president
criticizes State of Union
PARK RIDGE, 111. -
“Because of the grain em
bargo, farmers continue to
carry a heavier burden than
other Americans in the U.S.-
Soviet Union dispute,” the
president of the American
Farm Bureau Federation
said here Wednesday as he
expressed disappointment
with President Carter’s
State of the Union message.
“We had hoped President
Carter would announce a
break m all economic,
cultural and diplomatic ties
with the Soviet Union except
for those necessary to
resolve
this
conflict,”
Ag transportation facts
available from USDA
WASHINGTON, D.C. -
The U.S. Department of
Agriculture now has a fact
sheet available to the public
highlighting the rule of the
department’s Office of
Transportation in the
planning and development of
national agricultural and
rural transportation policies
and programs.
Titled “Facts About
USDA’s Office of Tran
sportation,” is describes
OT’s responsibilities as the
focal point for all USDA’s
transportation matters It
explains why USDA con
solidates its transportation
activities, and the im
portance of transportation to
agriculture
The four-page fact sheet
identifies major tran
sportation issues the office is
dealing with, such as railcar
shortages, high freight
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being dictated by the often
tenuous balance between
farm debt and farm in
come,” Erickson said.
According to the 1978 Crop
and Livestock Annual
Summary, the average net
mcome per farm in Penn
sylvania in 1977 was $5435.
As reported by the Penn
sylvania Crop Reporting
Service, taxes on farm
property were the third
highest production expense
m that year, he said.
The property tax, m the
Grange’s opinion, is the
single most inequitable tax
in the Commonwealth,
today. Because a fanner
must own large tracts of
land to operate his business,
he is, m effect, carrying a
larger portion of the burden
of the school property tax
than his non-farm neighbors.
The Clean and Green Act
of 1973, preferential
Robert B. Delano, AFBF
president said.
“Instead, he left farmers
and ranchers to carry the
burden of the embargo by
themselves.”
Delano said he was
disappointed that the
president failed to make
more mention of agriculture,
one of the great strengths of
America.
“We applaud President
Carter for his desire to
reduce deficit government
spending and balance the
federal budget,” Delano
said. “If the president and
Congress follow through on
this plan, many if not all, of
rates, rail line aban
donments, and regulatory
reforms.
Included m the fact sheet
is a section summarizing the
formation and role of the
Rural Transportation Ad
visory Task Force, which
recently completed its one
year appointment with a
report to Congress.
Copies of the fact sheet
may be ordered by writing
to- Information Division,
AMS, 3620-So., U.S
Department of Agriculture,
Washington, D C 20250.
WE’RE GROWING BETTER
Hits stock , inheritance taxes
assessments, and Act 515 of
1965, covenants, were
designed by legislators to
provide relief from
skyrocketing property taxes.
In many areas of the state,
especially the Southeast,
Clean and Green and
covenants help many far
mers to keep their
operations m agriculture,
where high property taxes
might have already forced
them to sell out, he told the
hearing.
Farmers still pay large
portions of their mcome for
school property taxes. Ac
cording to the United States
Department of Agriculture
in 1976, 34 percent of net
farm income was used to pay
the school property tax.
It is the belief of the
Grange that the collection of
a local net income tax would
be a more equitable way to
our economic problems
would be resolved.”
The farm leader also was
critical of the president’s
approach to the subject of
energy, saying, “The State
of the Union message failed
to indicate that government
is willing 'to make the
necessary sacrifices to end
our dependence on foreign
oil.”
Pointing out it is suspected
that there are vast oil and
gas reserves locked up in the
huge wilderness areas of the
western states, Delano said
the nation would never be
able to use those reserves
unless government
regulations are changed
radically.
support public schools.
According to a study per
formed by the Agricultural
Economics Department at
Penn State, adequate
revenues for the school
property tax could be
generated from a local net
mcome tax “at reasonable
tax rates.”
Like the property tax, it
would be a local tax. A local
tax allows the district’s
residents, who are aware of
the needs of their district, to
make their own expenditure
and revenue decisions,
Erickson said.
A side issue relating to the
tax burden of the property
tax is the money paid by the
State in lieu of property
taxes on publicly-owned
land. The Commonwealth
presently pays 20 cents per
acre, wluch is then divided
among the local
municipality, the schools,
and the county.
Because the acreage is not
taxed, the difference must
be made by the other
residents of the area, the
grape grower continued.
The State Grange believes
this payment should be in
creased to 50 cents per acre,
with 20 cents returning to the
local municipality, 15 cents
returned to die schools, and
15 cents to the county. This
increased payment would
lessen the burden on the
area’s residents to offset the
deficit.
Another tax problem m the
Commonwealth is the
Capital Stock Tax. The
major stumbling block
preventing Pennsylvania
farmers from incorporating
is this one percent tax on
corporate assets.
As mentioned before,
while many farms have
large capital outlays for
property, equipment, and
livestock, profits are slim.
Hence, a one percent tax on
a farm’s assets is a major
deterrent agamst farm in
corporation, Erickson
testified.
The benefits of in
corporation, such as cor
porate liability and easmg
inheritance procedures, are
made unavailable to the
farmer who is unable to
afford payment of this tax.
The State Inheritance Tax
has created a financial
hardship on the heirs of
many farmers. When farms
are valued at current
market value rather than
farm use value, the farmer’s
heirs often find that they
must sell portions of their
land to pay their Inheritance
Taxes, he said.
Unless farms are valued at
use value, more and more
farms will be subdivided to
pay the Inheritance Tax,
rather than being kept in
agriculture.
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Also, on the subject of
Inheritance Tax, is the rate
of taxation. The rate for
brothers, sisters, nieces, and
nephews is 15 percent, while
the rate for parents and
children is six percent.
Partnerships in family
farms often are not limited
to parents and children.
Brothers, sisters, nieces,
and nephews are also
members of these part
nerships Thus, the Grange
believes th same 6% rate
should apply to these
relatives, too.
The sales tax exemption
for farmers is a welcome
relief for agriculture And
yet, without more of these
kinds of aids to agriculture,
the family farm will not
survive in Pennsylvania.
With profits as low as theyy* I
are now, and taxes ever on
the increase, the future for
Pennsylvania agriculture is
bleak, he concluded.
I
*
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