Wealthy “Faux Farmers” Get Huge Agricultural Tax Breaks on Their Properties

Submitted by Elaine Magliaro, Guest Blogger  

According to T. S. Elliott in his poem The Waste Land: “April is the cruellest month.” I think many of us would agree because April is the month in which we Americans are required to file our annual income taxes. And thinking about who is actually paying taxes these days, has really gotten my dander up.

Today, while many working class and middle class people are trying hard to survive from paycheck to paycheck and when millions of Americans are out of work and unable to find new jobs that pay them a living wage, it’s hard to accept the fact that huge corporations like GE may not be paying any taxes at all while receiving tax rebates. It’s also maddening to see millionaires and billionaires who blew a hole in our economy and nearly caused a financial meltdown getting bailed out with OUR tax dollars.

It appears that the ultra-rich get all the breaks. Still, it seems many of them keep looking for different ways to hold onto their wealth by avoiding taxes while letting those of us who are less fortunate financially pay more than our share. Some of the well-heeled have even found a way to pay less than their fair share of local property taxes. They do that by claiming their large estates and properties as agricultural land. Here are the names of some of the “faux farmers” in New Jersey who have had their real estate taxes drastically reduced: Malcolm “Steve” Forbes, Jon Bon Jovi, E Street Band drummer Max Weinberg, Publishing magnate Donald E. Newhouse, former CEO of Commerce Bank Vernon Hill II, and Robert Wood “Woody” Johnson IV, heir to Johnson & Johnson and owner of the New York Jets football team.

Wealthy gentleman “farmers” haven’t just been gaming the system in New Jersey—they’ve been doing it in Texas, Florida, Iowa, Colorado, Alabama, and in many other states across this country. The tragedy of this tax avoidance by those who can well afford to pay more is that it is costing local governments the revenue they need to run their communities properly.

Several years ago, Art Cory, who was the chief appraiser for Travis Central Appraisal district in Texas, said: “It just seems to me that everyone ought to pay their fair share. That’s not happening now (American-Statesman, 2003). In regard to the agricultural tax break, Cory added, “You can go out and cut some brush, put out some feed and count the deer once a year and qualify.”

According to an article in The Nation, that’s what Michael Dell did with his second home—a suburban ranch in Austin. Because he hunted there periodically and maintained a “well-managed deer herd,” he was able to reduce the property’s 2005 market value from $71.4 million to an agricultural value of $290,000. That saved Dell—but cost Texas—$1.2 million. In 2007, The Wall Street Journal reported that Korea’s Samsung Electronics was able to qualify for a “wildlife management” agricultural tax exemption on more than fifty acres of land outside its semiconductor plant in Austin simply by erecting some birdhouses, eradicating ants, and taking a wildlife census. By doing that, the company reduced its tax bill by nearly 100%–from $21, 080 to $135! It’s sad to note that all the agricultural tax breaks in Texas have cost public schools in the state $1.5 billion in lost revenue.

A Few More Examples of Agricultural Tax Breaks

Colorado: Assessors in the state were reported to have said that even parking lots have qualified for agricultural tax breaks after some cows were brought in to graze on grassy strips between lanes. (Common Dreams)

Florida: Walt Disney World has received a farming tax break on 1,600 acres where it grows plants for its theme parks. At the time this was reported, the land owned by Disney was actually valued at $194 million but was taxed on a value of $12.3 million. (Common Dreams)

Alabama: In Mobile County, Ala., Delaney’s Inc. has planted pine seedlings on 54 acres left over after building a Hampton Inn, Marriott Courtyard, Lowe’s and Wal-Mart. This “tree farm” has been subdivided and laced with paved streets in preparation for development, and local officials insist that the land is not suitable for growing timber. But the developer’s lawyer pointed out that the law doesn’t require Delaney’s to be a good farmer — just a farmer. The result: a 2003 tax bill of $152 instead of $64,230. (Common Dreams)

Here are more details on the wealthy  “faux” farmers who have been getting agricultural tax breaks in New Jersey from New Jersey: “Fake” farms get tax breaks (Asbury Park Press)

The rolls of those with farm-assessed land in New Jersey read like a who’s who in the world of high finance, business and entertainment. Those in the rich-and-famous category with approved applications for tax breaks in 2009 and 2010 include:

— Financier Michael C. Price, with a net worth of $1.4 billion, Bedminster: 92 farm-assessed acres, on which he paid $359 in taxes in 2009.

— Robert Wood “Woody” Johnson IV, heir to Johnson & Johnson and owner of the New York Jets football team, Bedminster: 269 acres, $1,470 in 2009.

— Publishing magnate Donald E. Newhouse, with a net worth of $5.4 billion, Hopewell Township: 273 acres, $1,787 in taxes for 2010; in West Amwell, 77 acres, $611 in taxes in 2010.

— Publishing magnate Malcolm “Steve” Forbes, including properties with his wife, Sabina, Bedminster: 450 acres, $2,005 in taxes in 2009.

— E Street Band drummer Max Weinberg, Middletown: 34 acres, $122 in taxes in 2010.

— Rock star Jon Bon Jovi, Middletown: 7.1 acres, $104 in taxes in 2010.

— Lamington Farm Club, under the corporate umbrella of entrepreneur and TV personality Donald Trump, Bedminster: 195 acres; $277.

— John Whitman, husband of former Gov. Christie Whitman, Tewksbury: 167 acres, $1,521; in Bedminster: 65 acres; $173.

— Vernon Hill II, former CEO of Commerce Bank, Moorestown: 29 acres, $79 in 2010.

Now, let’s take a closer look at just one of the New Jersey “farmers” on the list above—Malcolm “Steve” Forbes. I bet you didn’t know that Forbes was into animal husbandry, did you? Well, Forbes actually raises show cows on his property, which qualifies for the agricultural tax break because it generates at least $500 in revenue annually. From The Center for Public Integrity (2000): “His New Jersey farm meets the state’s revenue test, with about $5,500 in yearly income, and he gets the federal write-offs for raising cattle, too.”

The Center for Public Integrity also reported the property that Forbes owns would have been valued at $9 million if he didn’t stock it with his show cows. An assessor had estimated that the land would be assessed at only $160, 531 because of the cows. So…Forbes paid a paltry $2,215 tax bill on his 449-acre estate because prize bovines were grazing there.

Well, there you have it, folks. That’s just one of the ways that the rich hold onto their riches. It’s also one of the ways that our cities and towns are losing out on essential tax revenues that are needed to pay for schools and other community services .

Because April is National Poetry Month, I’ve written another song parody for you in honor of Malcolm “Steve” Forbes:

Old Steve Forbes…He Had a Farm

A Song Parody By Elaine Magliaro (To be sung to the tune of Old MacDonald Had a Farm)

Old Steve Forbes

He had a farm.

E-I-E-I-O

And on that farm

He raised show cows.

E-I-E-I-O

He had moo-lah here.

He had moo-lah there.

He had lots and lots of moo-lah

Everywhere.

Old Steve Forbes

He had a farm.

E-I-E-I-O!

 

He milked them cows

For tax breaks. True!

E-I-E-I-O

He didn’t need

The money though.

E-I-E-I-O

He had moo-lah here.

He had moo-lah there.

He was a greedy billionaire.

Old Steve Forbes

He had a farm.

E-I-E-I-O

 

Old Steve was

A farmer—faux.

E-I-E-I-O

He knew how to make

His riches grow.

E-I-E-I-O

Did you hear him say

He’ll keep making hay

While all the little people pay their

E-I-E-I-DOUGH?

SOURCES

This Tax Day, ‘Farms’ Owned by the Rich Provide Massive Tax Shelter (The Nation)

Property Taxes Are For Parasites: Billionaires Use The “Fake Farm Loophole” To Not Pay Any… (Exiled Online)

Senate panel OKs rollback of some Colorado ag-land tax breaks (The Denver Post)

Faux Farmers Milk the System (Common Dreams)

Steve Forbes Cattle Farmer (The Center for Public Integrity)

New Jersey’s Farmland Assessment Act

Why Texas Firms Are Keeping Cattle On the Back Forty (Wall Street Journal)

Owners of $250 billion in property benefit from exemptions, loopholes amid school crisis (Statesman)

“Fake Farmers” Cost N.J. Taxpayers Millions (CBS Local, NY)

“Fake” farms get tax breaks (Asbury Park Press)

99 thoughts on “Wealthy “Faux Farmers” Get Huge Agricultural Tax Breaks on Their Properties

  1. Great article and great song, Elaine,
    It is amazing how the system can be gamed. It is also interesting to see someone like Steve “flat tax” Forbes taking advantage of the tax break by earning $5,500 raising cows! The gentleman farmer dodge is an interesting one and obviously a successful one. But let’s not forget that we as Americans are paying too much taxes. At least according to the Right.

  2. Ms. EM,

    Excellent topic and citations.

    I guess I will continue to trudge along with TurboTax for the rest of my bornd days and continue to pay taxes on my paltry gubbermint pinchin’ and real estate while the elite laugh at—and scorn—stupid servants like most of us here who try to do what is right for the whole of society.

  3. This one hits home. I know a number of farmers and our conversations will abruptly stop if I mention subsidies. My favorite was a fellow who owned 20 acres in partnership with his dad who had the rest of the farm, another 100 acres. One day he was channeling Reagan and preaching about the welfare (insert racist slur) in Cleveland. I pointed out he did no farming (his dad did it all) but he collected an ag subsidy. Without hesitation he said, “Well, if they are going to give it to you, why not take it?”

  4. The Denver Post ran some articles on homeowners in the metro Denver area who had huge expensive homes who were also reducing their property assessments with periodic visitations of grazing animals. (See Adams County)

    If the laws were interpreted in a manner consistent with income tax, then a loss would only be allowed for a limited amount of time. You can’t claim that you are taking a loss for writing novels or taking photos year after year while deducting home and travel, there is a time limit to actually show a profit.

    The expense also has to be logically proportional to the revenue in order to show that it is really a cost of business.

    In many places fields grow tall grass that is conducive to grass fires and weeds. In the corn belt therefore many fields are leased for corn operations run by subcontractors who come in the spring and fall to seed and harvest. Outside the corn belt hay is usually the crop. A contractor will pay to harvest grass from someone’s estate because it has cash value. From my general knowledge, I think that the cash value of hay is often less than annual property taxes based on the fair market value of location and view.

  5. rafflaw,

    You’re right about “flat tax” Forbes. It’s sad that so many people of great wealth do their best to game the system, isn’t it?

    *****

    FF Leo,

    Welcome back! You’ve been on an extended vacation from the Turley blog. Remember…only the poor pay taxes–well, maybe the poor and middle class…and wealthy people of conscience.

  6. Andy,

    While I was doing research for this post, I discovered that two former US Presidents got agricultural tax breaks on their properties: Ronald Reagan and Geroge W. Bush. I don’t know if there are any other presidents who got the same kind of tax reductions on their land.

  7. Bruce Springsteen does the same thing for his 200 acre “farm”.

    Buy a pig, cow or chicken and join in the savings.

  8. Here’s a link to an article that I read last year:

    Tuesday, June 15,2010
    The Making of Manhattan’s Elite Welfare Farmers
    Want fiscal reform? Let’s start by targeting the fattest farm subsidy checks—which are mailed to the richest New York ZIP codes.
    By Yasha Levine
    http://www.nypress.com/article-21342-the-making-of-manhattans-elite-welfare-farmers.html

    Excerpt:
    WALL STREET BANKERS and retired hedge fund billionaires have been talking about fiscal responsibility and deficit reduction, preparing the masses for austerity measures and cuts in social services—which we are told are regrettable, of course, but necessary nonetheless. Well, here is the perfect welfare program for the bailout queens to show off their fiscally conservative chops: Let’s see them cut federal farm subsidies, which funnel billions of dollars to the richest Americans, including notables like Ted Turner, David Letterman, Scottie Pippen, Paris Hilton’s grandpa, Charles Schwab, Microsoft billionaire Paul Allen and just about every single one of Sam Walton’s degenerate heirs.

    Most people know next to nothing about this $20 billion-a-year welfare for the rich program, probably because the billionaires want it that way. Why get the masses worked up? Best to let them think the $200 billion they spent from 1995 through 2006 went to friendly farmers with cute farmhouses, rather than to Chevron or Kenneth Lay. Better to let urban entrepreneurs call themselves backyard farmers and toil away for the locavore movement, than to realize that their rich neighbors are reaping actual “farm” subsidies.

  9. There are a lot of issues in Colorado regarding taking one time tax breaks for transferring development rights or giving up development rights to keep a ranch in grass. Sometimes city and county funds are used to “buy” development rights to ranches that might never have been developed anyway. The bigger the ranch the more versatility it has for agricultural issues.

    One issue is transparency.

    All of these land use and valuation legal issues can get really factually complicated with water rights, mineral rights, high capacity electric lines, public access issues, endangered species etc.

    There is an excellent informative blog called “The Law of the Land” by Patricia Salkin, a law professor at SUNY in Albany, that addresses some of these issues by summarizing court opinions.

  10. Marco,

    Except that Springsteen was careful not to register his house and surrounding three acres in Colt’s Neck as part of the farm.
    The farm’s an actual working organic farm. It’s an investment.

    There’s no “abusing the system” in this case, it’s a guy who wanted to own his own farm and had the money to do it.

    Elaine,

    I’ve been on parts of the Forbes Ranch in WY, there’s usually a good sized herd on that property. Can’t speak to any of his other properties though.

  11. More from Colorado:

    Tax break for farmers saves developers millions
    http://www.9news.com/news/article/185644/339/Tax-break-for-farmers-saves-developers-millions

    Excerpt:
    KUSA – An investigation by the Denver Post Sunday revealed developers and investors are reaping the benefits of a state law that’s supposed to help struggling farmers.

    Those developers and investors are saving millions of dollars by calling undeveloped property “farm land.” Property that will eventually become a subdivision or shopping center is getting the same tax break a farmer gets for growing crops or cattle grazing.

    And guess what? You could be paying more taxes because of it.

    Hundreds of empty acres near Brighton will soon become the next phase of Prairie Center. You’ll find stores, offices and new homes. You won’t find much in the way of farm animals or crops.

    **********

    Note: The story I provided a link to above includes a video report.

  12. Colorado tax break intended for struggling farmers enriches developers, investors
    By Christopher N. Osher and Eric Gorski
    The Denver Post, 3/6/2011
    http://www.denverpost.com/news/ci_17549051

    Excerpt:
    First of two parts

    One of the biggest players in Douglas County agriculture, at least for tax purposes, is not in the business of growing wheat or grazing cattle.

    It builds subdivisions.

    About one in six of the county’s parcels taxed as agricultural are owned by subsidiaries of Denver home builder MDC Holdings Inc.

    In Broomfield County, another hotbed of suburban growth, a staggering 95 percent of the county’s agricultural parcels are controlled by developer, commercial or investor interests. No one owns more land on the agricultural tax rolls there than Pulte Homes of Bloomfield Hills, Mich., the nation’s largest homebuilder.

    From Denver’s outskirts to exclusive mountain communities, the story line is similar. Developers and corporations more interested in bulldozing land for houses and strip malls than raising cattle or crops are saving millions of dollars in taxes by taking advantage of a state law meant to help struggling farmers.

    A Denver Post investigation of property-tax records sheds new light on the extent of the practice: Developers and firms with little or no ties to actual farming own at least 40 percent of the nearly 54,000 parcels classified as agricultural in eight Front Range counties.

    The lenient tax structure saves developers, businesses and others who have no real mud on their boots an estimated $366 million a year in those counties, according to a Post analysis using data from CoStar Group, a Washington-based commercial real estate research firm.

  13. Gyges:

    Why should Springsteen get a huge tax break for farming? He doesn’t need it. The property is worth a pretty penny and the loss of revenue to the community is substantial since it should be taxed as a residential estate or some such thing rather than as agricultural.

    The bottom line is that “farmers” should not get subsidies for growing or not growing crops, etc. and that any “subsidies” should be in terms of legitimate business expenses rather than actual cash payments in the form of grants from the Federal Government.

    Why should middle class tax payers be forced to partially support Ted Turner or Bruce Springsteen?

  14. Tax subsidies and property tax reclassifications are two different subjects.

    Some property owners are using activities that have little revenue to justify a revaluation which if it were framed as a deduction would result in a large net loss. Some of the haying operations have very minimal GROSS income. The property tax reclassifications aren’t shown as deductions but have the same net effect resulting in an actual tax loss from some hobby farms year after year and sometimes that can be very substantial.

    So there are two public policy issues: going forward and going back.

    I am not a lawyer but I think part of the key is in presumptions. Lawyers for rich people will use strained interpretations of agricultural enterprise and other terms in the statutes that are inconsistent with the presumption that farms make an actual real profit almost every year. This can be proven using legislative intent because at the state and local level there are lots of records by what is meant when these laws were passed.

  15. I just really need editing

    Tax subsidies and property tax reclassifications are two different subjects.

    Some property owners are using activities that have little revenue to justify a [use reclassification] which if it were framed as a [tax] deduction would result in a large net loss.[The property tax use reclassification from residential to agricultural is basically a hidden transfer payment.] Some of the haying operations have very minimal GROSS income. The property tax reclassifications aren’t shown as deductions but have the same net effect resulting in an actual tax loss from some hobby farms year after year and sometimes that can be very substantial.

    So there are two public policy issues: going forward and going back.

    I am not a lawyer but I think part of the key is in presumptions. Lawyers for rich people will use strained interpretations of agricultural enterprise and other terms in the statutes that are inconsistent with the presumption that farms make an actual real profit almost every year. This can be proven using legislative intent because at the state and local level there are lots of records by what is meant when these laws were passed.

    [You could argue that there should be no tax differences and all property should be taxed at market value regardless of use. In the past that sort of argument was considered as promoting development. But changes in our energy situation have changed the development market anyway.

    Another factor is that sometimes wind turbines are considered an agricultural use and a lot of wind turbines are being put on land that was never used for anything other than agriculture.]

  16. Florida Man Acquitted in Shooting of Two Huskies Who Were Harassing Cows

    if you recall the above story about a man shooting two dogs chasing some cows but if you look close you can see a sidewalk adjacent to the cowpasture.

    this is what developers in florida do. they buy land to subdivide but untill they are ready to build they put cows on it and call it agricultural. they pay very little in property taxes because the state wants to help “family” farms.

    you know, like the gambino family
    THELASTSTATEMENTWASNOTINTENDEDTOBEAFACTUALSTATEMENT.

  17. Man O man…could they save the inner cities beautiful buildings by giving them tax breaks for raising rats….rather than demolish them because its cheaper than paying the taxes….. At least these buildings have more of a use….

    Thanks Elaine M., great article…..

    FF LEO….always great to see you….

  18. The Denver Post recently did a good article on ‘ag’ property ratings in Adams county – some held by well known developers, such as Robert Lembke of United Water and Sanitation District.

    It seems the ratings should be reviewed each year to ensure the land receiving the ag rating tax break is actually being used for ag purposes, not in a holding pattern for future development – not one cow for one day in each year, but consistent ag usage to qualify for the ag rating/tax break.

    Another issue in Colorado rural areas is new construction not being entered on the tax rolls, so increased value of properties isn’t reflected in property taxes being collect. In one case, the property tax avoider was a local politician allegedly exerting his ‘influence’. Power peddling anyone?

  19. kay

    most groves in the orlando area were killed off in a bad freeze in 84/85. developers bought the land with dead trees, sold the trees for firewood and started subdividing. look at a map of orlando and surrounding areas and you’ll see many places with nauseatingly cute names. those are the old groves.

    the same thing is happening to the old apple orchards in the new england area. there the new owners are finding out what lead arsenate is.

  20. Wow … Elaine has struck gold … I had no idea the wealthy were going to such lengths to scam the country … technically, these write-offs may be legal but we all know they weren’t intended for people like Forbes or Bon Jovi or any of the other scum bums claiming them.

    Just another Marie Antoinette moment.

  21. Marco,

    You can be against farm subsidies, that’s an entirely different discussion. This article was about people who abuse farm subsidies by claiming non-farm land as farm land. Since Mr. Springsteen’s farm is an actual farm, it doesn’t deserve to be included in a list of those properties like you suggested.

    Colorado has Medical Marijuana laws. Lots of people abuse this by claiming medical conditions they don’t have. The Chemo patient who uses it to stimulate hunger shouldn’t be grouped in with the guy that fakes migraines.

  22. Pete

    I didn’t know about lead arsenate either. So you are saying that the moth insecticide it was used in the old orchards in New England and put lead permanently in the land? Did it get in the apples?

    Wasn’t there something about problems with lead in the Obama White House garden project?

    What do you think should be done with lead in the environment?

  23. rafflaw,

    I really had no idea that so many were taking such advantage of tax breaks that were intended to help those in need.

    In spite of all their money, they are nothing more than leaches feeding off the lives of others.

    They are indeed Marie Antoinettes … fate awaits them.

  24. rafflaw,

    It is obvious that we have been abused. Now, we either cower in the corner and take it or we fight back.

    I don’t do cower.

  25. Pete-

    None of my statements are intended to be statements, factual or otherwise. This is the one thing I am good at.

    Since I retired, I have discovered a marvelous loophole in the income tax regulations:

    Social Security Payment + Pension = Diddly Squat

    Then; Income Tax = 0 (No income, no tax)

    Add to the equation; I don’t have to work any more

    Result: Being an old fart isn’t so bad.

    “90% of what I do is useful and important. Oops, make that 3%.”

  26. kay

    lead arsenate was used as an insecticide as was an arseneated copper (i don’t recall the name, it was also used as a green pigment) but it is in the soil and construction stirred it up during the housing boom. they stopped using it for the most part when clorinated hydrocarbons (DDT endrin etc) came on the market in the 1940’s.

    i’m not sure what can be done with lead unless you could find a plant that stores it in its roots. lead was used in alot of products.

    although with lead arsenate which is worse the lead or the arsenic?

  27. Elaine

    With a name like HenMan–I have to ask if you’re into animal husbandry like Steve “Faux Farmer” Forbes.

    ===================================================

    as long as he’s not into animal husbandry like Neal Horsley.

  28. Elaine-

    The only thing I grow is older. I used to raise pedigreed bobcats, but after Michael Vick got arrested I gave it up. My carnival act, “HenMan Fights A Bobcat to the Death” wasn’t drawing the crowds like it used to. Anyway, the bobcats were starting to win too many matches and my medical bills were going through the roof getting all my bites and scratches sewn up. You can only get your juglar vein severed so many times, you know.

  29. HenMan,

    I paid $20 to get into that “HenMan Fights A Bobcat to the Death” show at the local VFW hall and how you could call the scrawny little thing named Bob a cat, I’ll never know.

  30. Elaine

    i never understood why of all the farm animals he could have sex with why he picked a mule. maybe he was worried about getting it pregnant.

  31. HenMan,

    Yeah but that little thing was no bigger than a kitten and … he beat you! You could have gone more than a half a round.

    I was too inebriated to ask for my money back.

  32. Pete

    Considering that lead supposedly gets into vegetables and is a health hazard it must be going in thru the roots.

    Even if it could be collected, how would lead be stored so it wouldn’t be back in the air, water and soil?

  33. Elaine

    what do you think of this?

    http://www.steamboattoday.com/news/2011/apr/04/wolf-mountain-purchase-development-rights-plan-eme/.

    The Routt County Board of Commissioners will hear a proposal this morning to spend almost $218,000 in property tax revenues…

    Wolf Mountain Ranch is also a working cattle operation…

    When landowners donate a conservation easement, the land is permanently protected from development… There are significant tax breaks associated with the move, ….

    funding partners in the easement include ranch owner Bob Waltrip, of Pirtlaw Partners Ltd.,
    ——————

    Pirtlaw Partners, Ltd. is located at 1929 Allen Pkwy Fl 12 Houston, TX 77019. The officers include Pirtlaw Management, L.L.C.. Pirtlaw Partners, Ltd. was incorporated on Wednesday, March 06, 1996 in the State of TX and is currently active. Robert L Waltrip represents Pirtlaw Partners, Ltd. as their registered agent.

    ————-

    Pirtlaw is listed in Routt County Assessors office as owning a lot of property in Routt County. 931073001 is one of them. It is a 98 acre vacant parcel. It is listed as having actual value of $2,060 and assessed value of $600.

    Inside city limits almost all land parcels no matter how small are listed as having land value of 600K

  34. Pete

    Do you think it would be technically feasible to plant some sort of super metal absorbent fiber plant in the lead and arsenic polluted old orchards and then harvest the fiber and safely bind it into building blocks in such a way that it won’t re leach?

  35. I tried to read this article to my wife. She stopped me and asked ‘What are you going to do about it?’
    The answer is: nothing. No one is going to do anything about this.

  36. REPORT: In 12 Years, Income For Richest 400 Americans Quadruples, Tax Rate Nearly Halved
    By Judd Legum
    Think Progress, 4/18/2011
    http://thinkprogress.org/2011/04/18/tax-disparity-chart/

    Excerpt:
    New data released by the IRS reveals that, over a period of 12 years, tax rates for the richest 400 Americans were effectively cut in half. In 1995, the richest 400 Americans paid, on average, 29.93% of their income in federal taxes. In 2007, the last year for which the IRS has released data, the richest 400 Americans paid just 16.63%.

  37. Only Little People Pay Taxes
    Why a janitor ends up with a higher tax rate than a millionaire, and seven more charts that show how the richest Americans beat the IRS.
    — By Dave Gilson
    Mother Jones, 4/18/2011
    http://motherjones.com/politics/2011/04/taxes-richest-americans-charts-graph

    Excerpt:
    “We don’t pay taxes. Only the little people pay taxes,” billionaire hotelier Leona Helmsley famously (and allegedly) sniffed. She wasn’t entirely correct: The superrich do still pay taxes. The wealthiest 1 percent of taxpayers pay 32 percent of all income tax collected by the federal government.

    But the superrich don’t pay as much as they used to—and thanks to a combination of tax cuts and preferential tax policies, their tax obligations can be less demanding than the so-called little people’s. In fact, the very wealthiest Americans’ tax burden has been steadily dropping for years, even as they’ve enjoyed astounding income growth not seen by the vast majority of Americans.

  38. End ‘Tinkle Down’ Economics
    Katrina vanden Heuvel
    The Nation
    April 18, 2011
    http://www.thenation.com/blog/159999/end-tinkle-down-economics

    Excerpt:
    Here’s a modest proposal on this tax day 2011. Tax investments like ordinary income.

    For thirty years, we’ve been treated to the big whopper that cutting taxes on the rich creates jobs. Let’s get real. Trickle-down—or, as my good friend Jim Hightower likes to call it, tinkle-down economics—hasn’t worked. Case closed. After George W. cut taxes for his rich pals, far fewer jobs were created than after President Bill Clinton raised them in the 1990s.

    Then in December, the Obama-GOP deal extended the Bush tax cuts for the wealthy at a two-year cost of about $70 billion a year. Now Congress is making $40 billion in painful budget cuts this year. Meanwhile, President Obama, Representative Paul Ryan and others are battling over budgets and tax plans for the next decade and beyond. For the most part, what’s been missing from these suffocatingly narrow discussions is an easy source of income: taxing investments like ordinary income.

  39. The Top 10 Tax Breaks — And How They Help The Wealthy The Most
    Huffington Post, 4/18/2011
    By Dan Froomkin & Jake Bialer
    http://www.huffingtonpost.com/2011/04/18/the-top-10-tax-breaks-_n_850534.html

    Excerpt:
    This is the time of year when we are most aware of our tax burdens. But what we may be less aware of are all the huge tax breaks built into our system. Most Americans benefit from one or more — but it’s the wealthy who benefit the most.

    The government spends money through appropriations and writing checks, but it also showers individuals and companies with a astonishing array of special exemptions, credits and deductions that amount to a $1.1 trillion giveaway each year. (For comparison: the big budget fight that concluded last week cut spending by about $38 billion.)

    About half of the money lost to “tax expenditures” comes from the 10 breaks listed below.

    Few of the biggest breaks directly benefit corporate America. Most are widely distributed among the population and are meant to reward and encourage what is generally considered responsible behavior. Each break also represents a powerful, and in some cases broad-based, constituency.

    But in stark contrast to, say, social programs, tax breaks vastly favor the rich over the middle class and the poor.

  40. How to Pay No Taxes
    Source: Business Week
    By By Jesse Drucker
    April 15, 2011
    http://sanders.senate.gov/newsroom/news/?id=1b9903a2-1944-4107-a8ea-4e5116fdb51e

    Excerpt:
    ELEVEN SHELTERS, DODGES, AND ROLLS-ALL PERFECTLY LEGAL-USED BY AMERICA’S WEALTHIEST PEOPLE

    For the well-off, this could be the best tax day since the early 1930s: Top tax rates on ordinary income, dividends, estates, and gifts will remain at or near historically low levels for at least the next two years. That’s thanks in part to legislation passed in December 2010 by the 111th Congress and signed by President Barack Obama.

    “This is clearly far and away the most generous tax situation that’s existed,” says Gregory D. Singer, a national managing director of the wealth management group at AllianceBernstein (AB) in New York. “It’s a once-in-a-lifetime opportunity.”

    For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate-what they actually pay-fell from almost 30 percent in 1995 to just under 17 percent in 2007, according to the IRS. And for the approximately 1.4 million people who make up the top 1 percent of taxpayers, the effective federal income tax rate dropped from 29 percent to 23 percent in 2008. It may seem too fantastic to be true, but the top 400 end up paying a lower rate than the next 1,399,600 or so.

    That’s not just good luck. It’s often the result of hard work, as suggested by some of the strategies in the following pages. Much of the top 400’s income is from dividends and capital gains, generated by everything from appreciated real estate-yes, there is some left-to stocks and the sale of family businesses. As Warren Buffett likes to point out, since most of his income is from dividends, his tax rate is less than that of the people who clean his office.

    The true effective rate for multimillionaires is actually far lower than that indicated by official government statistics. That’s because those figures fail to include the additional income that’s generated by many sophisticated tax-avoidance strategies. Several of those techniques involve some variation of complicated borrowings that never get repaid, netting the beneficiaries hundreds of millions in tax-free cash. From 2003 to 2008, for example, Los Angeles Dodgers owner and real estate developer Frank H. McCourt Jr. paid no federal or state regular income taxes, as stated in court records dug up by the Los Angeles Times. Developers such as McCourt, according to a declaration in his divorce proceeding, “typically fund their lifestyle through lines of credit and loan proceeds secured by their assets while paying little or no personal income taxes.” A spokesman for McCourt said he availed himself of a tax code provision at the time that permitted purchasers of sports franchises to defer income taxes.

    For those who can afford a shrewd accountant or attorney, our era is rife with opportunity to avoid, or at least defer, tax bills, according to tax specialists and public records. It’s limited only by the boundaries of taste, creativity, and the ability to understand some very complex shelters.

  41. kay

    most plants that i know of don’t pick up lead in the soil, it wasn’t in the apples that were grown in the orchards. the problem would be more ground water or dust/airborn for the construction workers and landscapers. also for children playing in it. not sure which plants might or might not pick up the lead but if there is it would be a good way to collect for disposal.

  42. rafflaw,

    I have decided that these people are an abomination upon the land and are responsible for earthquakes, tsunamis, hurricanes, tornadoes, flu bugs, halitosis, and warts.

  43. rafflaw
    1, April 18, 2011 at 9:15 pm
    Blouise,
    It makes more sense than saying that the gays caused all those disasters!

    ===================================

    Exactly …

  44. Kay,

    To speak to your question to me earlier today: I think people of means who truly believe in setting aside land for migrating animals, for wildlife preserve, etc., can do that best by donating land–instead of asking for tax breaks on land they own.

    In Massachusetts where I live, some wealthy families donated land to an organization called the Trustees of Reservations. Now we have a beautiful beach in Ipswich and an organic farm in Ipswich and Hamilton–thanks to them. We also have many other properties in our state that we know will be preserved in perpetuity and never developed for profit.

    http://www.thetrustees.org/

    Here are some of the places owned by the Trustees of Reservations that my husband and I are happy have been given over to their care and supervision:

    http://www.thetrustees.org/places-to-visit/northeast-ma/agassiz-rock.html

    *****

    I have more links for you. I can only include two links per comment.

  45. It sounds basically hopeless to collect high lead contents in soil short of just moving the entire soil to a different location. Maybe it would help if they put a layer of uncontaminated soil on top.

  46. pete

    if you were to inoculate the soil of areas known to have lead problems with underground fungi systems, would they contain the lead in any significant way / discouraging dust etc.?

  47. As a current farmer, knowing other farmers, let me give you a few morsels of thought:

    Part 1, Taxes:
    For small operators, the only programs from the Government that were worth any cash value were EQIP programs to mitigate environmental impact, administered by the USDA NRCS.

    Recently, after a pilot program, that’s grown to include one moderately small “high tunnel” – an unheated greenhouse.

    These are cost-shares, not grants, nor subsidies. No one pays me not to grow Arugula, or tomatoes. No one pays my goat farmer friend to not milk goats or make cheese. No one pays either of us, nor gives Ag land exemptions to any of my friends as they’re all small operators. You can’t live on and farm the same parcel of land, you must have a 5 acre “homestead” and a separate agricultural parcel defined by deed. Then the ag land can be taxed at a non-residential rate, be that “tree growth” or “agricultural” or “current use (fallow)” classifications.

    Farm Services Agency will provide low-interest loans to VIABLE farms, with a history of credit decline from ‘traditional lenders’. It’s still a loan, with a lien.

    Part 2, Lead Contamination:

    To lead in the soil, it’s an issue for all urban farmers, and for those on former orchards. There’s a difference in lead present, and motile lead absorbable by plantlife. In general, if there’s lead present, you want to lime the soil to raise pH levels above 6.5, as the lead is then stabilized.
    Sure, you don’t want to be feeding unwashed root crops to your children, but the plants will not uptake elemental lead from the soil in the form of oxides. Better still, forego the root crops, unless peeled – and grow crops which can either be mulched to isolate them from soil exposure, (spinach, tomatoes) or grow sufficiently tall crops (as corn would be) to eliminate soil contact.

    While I adore mushrooms, and particularly the morels one finds in old orchards, I’d limit the number of them consumed unless one could have them analyzed in a lab.

    That said, I’ll also make the assumption that as morels like either an area with a recent burn or limestone based soil, such as the traditional orchard areas of New York.
    With a more alkali soil, the pH will be higher than here in much of New England were morels are rare (our soils are often pH 5.3-5.5 as granite is acidic), and it’s assumed they occur in areas of pH 6.0 or higher with greater regularity.

  48. You make the fatal assumption that the government deserves a hunk of whatever you produce. Rather than making the government live within its means, you assume rich people are evil and need to pay more. You must be liberal.

    I wish I was a wealthy farmer. I would take advantage of all these LEGAL holes in the ILLEGAL tax system.

  49. Speaking of Colorado, someone might want to test these agricultural tax breaks in Routt County (Steamboat). If so, the following info might help them. Routt County is showing on pin # 222800001 that my former neighbor, Kevin M. Bennett, the convicted drug dealer who was president of the City of Steamboat Springs, has a garage and a guest house that were built in 1950. However, there is a survey registered with Routt County that shows that in 1999 at 701 Princeton Ave there was only a house and a shed, no garage and no guest house. I wrote to Routt County 7/18/2011 via priority mail 420 80477 9405 5036 9930 0162 4690 10 and complained about this being a false government certificate and attached a photocopy of the survey, a photo copy of pages of the building permits, a photocopy of photos of the detached garage with the space above and behind it with Bennetts’ Audi with the license plate number VX88869 visible, and a letter dated 11/26/2001 from the city manager to Kay Sieverding cc the city attorney and the city council discussing the building of Bennett’s garage and guest house. I sent a copy of that to the U.S. Attorney in Colorado via priority mail 420 80202 9405 5036 9930 0162 4689 90 so anyone can get a copy via FOIA. As of this date 8/6/2011, Routt County has not responded to my request to correct the official certificate and my complaints Issuing a false certificate is a felony see C.R.S. 18-8-406 and that knowingly failing to correct it to hurt me or help Kevin and Jane Bennett is official misconduct see C.R.S. 18-8-404.

    I think that this information can be used to impeach any of the Routt County Comissioners or the assessor Gary Peterson.

  50. Speaking of Colorado, someone might want to test these agricultural tax breaks in Routt County (Steamboat). If so, the following info might help them. Routt County is showing on pin # 222800001 that my former neighbor, Kevin M. Bennett, the convicted drug dealer who was president of the City of Steamboat Springs, has a garage and a guest house that were built in 1950. However, there is a survey registered with Routt County that shows that in 1999 at 701 Princeton Ave there was only a house and a shed, no garage and no guest house. I wrote to Routt County 7/18/2011 via priority mail 420 80477 9405 5036 9930 0162 4690 10 and complained about this being a false government certificate and attached a photocopy of the survey, a photo copy of pages of the building permits, a photocopy of photos of the detached garage with the space above and behind it with Bennetts’ Audi with the license plate number VX88869 visible, and a letter dated 11/26/2001 from the city manager to Kay Sieverding cc the city attorney and the city council discussing the building of Bennett’s garage and guest house. I sent a copy of that to the U.S. Attorney in Colorado via priority mail 420 80202 9405 5036 9930 0162 4689 90 so anyone can get a copy via FOIA. As of this date 8/6/2011, Routt County has not responded to my request to correct the official certificate and my complaints Issuing a false certificate is a felony see C.R.S. 18-8-406 and that knowingly failing to correct it to hurt me or help Kevin and Jane Bennett is official misconduct see C.R.S. 18-8-404.

    I think that this information can be used to impeach any of the Routt County Commissioners or the assessor Gary Peterson.

  51. Steve,

    “Fatal assumption…..”
    Puleeeeeze!
    These are local communities that would benefit from your paying your fair share of property taxes, Steve.
    These are your local school, police and fire departments, special education. These are your NEIGHBORS and local community services that would benefit. These are areas YOU have benefitted from while you lived there.

    Think about it, Steve!

  52. This discussion thread is ridiculous! The issue is not the intelligent wealthy who were smart enough to study the poorly written laws to find more ways to make money. The issue is the poorly written and thought out laws that make this possible. Quit vilifying the wealthy that provide jobs o the middle class and fix the laws.
    I notice that everyone on this thread is so concerned about what they perceive these wealthy people or corporations have or have not paid in property taxes, but there is ZERO attention to the money the give to their local communities directly through hospitals, parks, endowments, etc.
    Again, fix the law, don’t vilify the people that actually take the time to understand it and make it work to their advantage.

  53. Oh yeah.

    Don’t hate the player, hate the game.

    Or you could hate the players that rigged the rules, in which case hating the player and the game concurrently makes perfectly good sense.

  54. I do the same exact thing. Partly because the system lets me but mostly because I get rooked on income taxes and this just one way to bring my tax bill back to normalcy. Plain and simple, a flat (fair) tax would eliminate the need to use the aggregate tax system against itself and it ensures that EVERYONE pays their share. Right now, the tax system penalizes entrepreneurs; those willing to risk capital to build something; it’s rewards those who don’t.

  55. TH,

    If all things are equal and you give the folks at or below the regional adjusted poverty levels….. I think that make the most sense…..

    I love the class warfare fight between the investment bankers and traders….. It seems the traders are paying 15% and the bankers about 30% on the same income…. Infighting on wall street is funny, if you think about it….

  56. In Texas, when the land is reverted back to non-ag status, the current owner has to pay “rollback taxes”. This is essentially the difference between the taxes paid under the exemption and what they would have been without the exemption…..PLUS 7% interest on each years assessment from the month it would have been due in that year. This has to happen before the sale of the land closes. I don’t know about other states, but in Texas, it is not a free ride…….it merely pushes the payout down the road. I understand there may be some differences between counties, but this basically the concept.

  57. Would it be preferrable if these people sold their land to developers? Then they could develop the former farm land and the towns and states could collect more taxes. Isn’t that what government at all levels really wants?

  58. The only reason the “middle class” ever deride the wealthy is that they themselves aren’t wealthy. Taking from the wealthy to give to the poor makes everybody poor. When are we Americans as a whole going to quit whining about our lot in life and work to make it better? I don’t pay a lot of taxes most years, and that is because I stopped using crappy tax software and went to a tax accountant. The savings for LEGAL and QUALIFIED tax credits more than pay what they charge. Stop complaining because somebody else has something you don’t. And stop trying to take my money and give it to worthless people who never go out and actively seek a job. If the average “poor” American was willing to work, we would have less of an immigration issue because the jobs wouldn’t be there. Manual labor such as lawn work and unskilled construction is an opportunity to move up and not beneath your dignified ass. For the record I have done both on my way to a well-paying job, which supplements my farm income or lack of. So screw your sense of entitlement. You want farmers to stop taking incentives, then be prepared to pay more for your food instead of our nation having one of the cheapest food supplies on Earth.

  59. Brent,

    Read the actual story….. No one is talking about farmers…… Real farmers….. Just the ones that buy the farm and use it for personal use….. They raise and farm nothing……. Case in point….. You pay taxes on your entire property…… If you put in a garden….. Shouldn’t you be able to call it a farm…. And pay basically nothing in taxes….

    Hey wait, i like that idea……

  60. According to an article in The Nation, that’s what Michael Dell did with his second home—a suburban ranch in Austin. Because he hunted there periodically and maintained a “well-managed deer herd,” he was able to reduce the property’s 2005 market value from $71.4 million to an agricultural value of $290,000. That saved Dell—but cost Texas—$1.2 million. In 2007, The Wall Street Journal reported that Korea’s Samsung Electronics was able to qualify for a “wildlife management” agricultural tax exemption on more than fifty acres of land outside its semiconductor plant in Austin simply by erecting some birdhouses, eradicating ants, and taking a wildlife census. By doing that, the company reduced its tax bill by nearly 100%–from $21, 080 to $135! It’s sad to note that all the agricultural tax breaks in Texas have cost public schools in the state $1.5 billion in lost revenue.

    relating to this: Nowhere in this article does it state that Dell pays the Full Market Value upon the structures upon the property, such as the home, barns, buildings, etc. Nor does it mention that he has a property manager doing more than just 3 of the basic requirements. He has an always improving habitat. So, many are just cutting a few paths, trowing out a mineral block and putting out corn, which is not protien for about 3 months, thats the group that need to have their lower valuations revoked.

    My opinion, that 1d1 needs to be done away with, and only allow agricultural to the actural purdent producers or agricultural comodities.

  61. Growing, or renting it out to growers, or to teach kids farming is a waste of land that doesn’t deserve agricultural subsidies.

  62. It isn’t just farmland of faux farmers.
    Few believe that anything but the local school, church, or museum should be tax exempt for property taxes, and certainly if they include housing. Empty buildings tax exempt is far different in community resource use than otherwise, or property held for speculative reasons. Why should all subsidize the wealth of a few, to their detriment?

    These are not complex calculations in apportionment!

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