Land Conservation, How The Wealthy & The Swamp Did It To Us Again
When Congress and The Swamp tell us a tax benefit is for a good purpose only uncaring ogres could oppose, immediately raise the red flag and be very wary.
Who could possibly object to tax benefits given to landowners who enter into agreements with land trusts or government agencies to donate an easement which permanently protects important conservation resources?
It works this way. If the land is worth $10,000,000 if used to build homes and $2,000,000 if the landowner gives up the right, the landowner can deduct $8,000,000.
This tax benefit was enacted in 2006 and was made permanent in 2015. The donor can take a deduction for the value of the easement and use it to shelter up to 50% of their income in the year of the donation and carry forward any unused portion for 15 years. When the donor of the property is a Farmer (someone who makes more than 50% of his income from farming or ranching), then the Farmer can deduct the amount of the donation to shelter 100% of their income and carry any unused amount forward for 15 years.
For example, you own a tract of land which would be a great conservation area and you grant a permanent easement to a state agency. The value of the easement is $1,000,000. If you are making $100,000 per year, then you will reduce your taxable income by $50,000 per year 2019 and every year thereafter for 15 years. If you are in the 30% income tax bracket, you will save $15,000 per year for 15 years for a total of $225,000.
What’s Not To Like About This Arrangement?
This IRS section was quickly used by promoters of tax shelters. The promoter acquires a piece of land, obtains an appraisal saying the land is worth up to 10 times what they paid, sells interests in the land to investors and creates a vehicle allowing these investors to deduct between 2.5 and 10 times what they invested in land conservation deductions.
Here is an example of the benefit a high-income Individual earning $500,000 per year and in a 37% federal income tax rate can obtain. Assume the earner invests $1,000,000 in one of these projects and is able to deduct $4,000,0000 (a conservative example because many of these packages offer even larger deductions).
Year 1, the Individual’s taxable income will be reduced from $500,000 to $250,000. The $5 million total will be reduced to $4.75 million. Assuming income continues at $500,000 for the next 15 years, the earner can reduce his taxable income by $250,000 each year for deductions totaling $4 million. If the earner’s federal income tax rate stayed at 37%, then the earner will save $4 million x 37% = $1,480,000. This is a profit from tax savings alone of $480,000.
Because of criticism in the Wall Street Journal and other financial publications, the IRS decided there might be something wrong. They now require promoters of these schemes and their investors to provide disclosures to the IRS. This has prompted the promoters of these schemes and their clients to hire people in The Swamp to lobby Congress to keep the IRS from cracking down on these schemes.
According to a 3/14/19 Wall Street Journal article by Richard Rubin, from 2010 - 2016, taxpayers deducted $20,000,000,000. Since many of these investments allowed investors to deduct multiple amounts of their deductions for up to 15 years, the real story is the true cost to the government is many times more in lost taxes.
Senator Daines and Senator Stabenow introduced Senate Bill 170 limiting the deduction amount to 2.5 times the investment.
Senator Grassley and Senator Wyden, the chairman and ranking member of the Senate Judiciary Committee, are now going to hold hearings. This will prompt more $ to lobbyists and more $ to purchase tickets to fundraisers held by the Members of Congress.
These actions in the Senate will generate more $ to The Swamp from the tax shelter promoters and more contributions to the “influential” Senators.
Who Loses?
The answer is simple. Almost all American taxpayers. The billions of dollars being saved by the tax shelter investors has to be made up by the rest of us or by increasing the national debt. There is no other way to make up the lost revenue.
Most all Individuals favor conserving land. However, it shouldn’t be accomplished by making laws and regulations providing incentives to only some of us through the income-payroll tax system.
Doesn’t it make more sense if we want to encourage conservation to just raise the money in the most economically efficient manner which doesn’t attempt to legislate winners and losers? Of course it does. How? With The FAIRtax, the only “Fair Tax”. Then when Congress has the money, let them decide how to best encourage landowners to grant conservation easements. Then at least it’s not hidden.
Conclusion
Like with most “special provisions” of the income-payroll tax system where The Swamp and Congress hope no one questions their motives, the 1st thing we have to ask is, “What’s in it for them?”
We have learned the only thing motivating The Swamp and their allies in Congress is doing something benefitting them either with money now or with the opportunity to make more money later. They like nothing more than making people beholden to their actions because this keeps these people who got the tax break motivated to keep paying and paying to The Swamp and to their allies in Congress.
Why reward this type of behavior? Why permit the way we collect taxes to fund the government be an auction system where only the wealthy and well-connected participate?
The author George Bernard Shaw said, "You see things; and you say “Why”. But I dream things that never were; and I say “Why Not”.
We say to you President Trump, “Embrace The FAIRtax and real tax reform! Stand up to The Swamp. They will oppose you anyway because they see you as a threat. What have you got to lose?”
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future: “If you want a picture of the future, imagine a boot stamping on a human face—forever.”
Take Back America! Pass The FAIRtax Now!
Online Resources
These links will help you promote and support The FAIRtax. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
Americans For Fair Taxation - Home Page
Americans For Fair Taxation - Facebook Page
Americans For Fair Taxation - YouTube Channel
Americans For Fair Taxation - Twitter Page
Americans For Fair Taxation - Chairman's Report Podcast on Spreaker
Americans For Fair Taxation - Chairman's Report Podcast on Apple
Americans For Fair Taxation - Chairman's Report Podcast on iHeart Radio
Official FAIRtax Logo Store
The FAIRtax Guys - Home Page
The FAIRtax Guys - Facebook Page
The FAIRtax Guys - YouTube Channel
PopVox - The People’s Voice On All Things Legislative
Read Evasion Study Summary
The FAIRtax Guys
Ron Maiellaro & Bob Paxton perform their FAIRtax Power Digital-TV Show & Podcast. When the show streams to Facebook, The FAIRtax Guys plus a few AFFT experts are responding “live” to your comments and questions. A free app is available for iOS and Android.
Digital TV: Tues-8PM-ET Americans For Fair Taxation - Facebook Page
Digital TV: Wed-7PM-ET The FAIRtax Guys - YouTube Channel
Podcasts: Fri-6AM-ET Posted on Spreaker, Apple Podcasts & iHeart Radio.
Digital TV & Podcasts are available on The FAIRtax Guys - Past Shows
This week's Episode #169 - "How Money Walks"
People vote with their feet and take their money with them as many states with income taxes are discovering. Using the website How Money Walks The FAIRtax Guys demonstrate how people and their earnings are walking away from high tax states, states with an income tax, and migrating to more tax friendly states including states without an income tax. Figures don’t lie!
Same applies to countries. You will be amazed at the number of iconic companies that we associate with America who no longer reside in America. Why? Very simple - the convoluted, complicated and costly income tax code system. The FAIRtax Guys give proof showing how onerous tax codes drive people and businesses away.
So what is the solution to this problem? You guessed it. The FAIRtax!
Recent comments from viewers encouraged The FAIRtax Guys to relaunch the “Slogan Contest”. There is a lot of talent in the viewership and The FAIRtax Guys would like to use some of that talent to come up with a catchy slogan that helps get the message out. America loves slogans. So get involved and “slogan away”. Click "Here" to email us your favorite slogan about the IRS.
Enjoy this episode and please Share it with others you know. We need a ground swell of supporters to make this happen.
What Can Each Of Us Do?
Call the local and DC offices of your Representative and 2 Senators. Use the following script:
American's Big Solution - The FAIRtax Primer America Needs
Hard to believe but there still are people who have not heard of The FAIRtax. For those people, America’s Big Solution provides a starting point in their study of The FAIRtax and is meant for any age.
America’s Big Solution is an introduction to The FAIRtax written by Terry Tibbetts, author of “A Spartan Game: The Life and Loss of Don Holleder”, with help from Ron Maiellaro, President The Florida FAIRtax Educational Association. You can buy an electronic version for only $2.99 for the Amazon Kindle, the Barnes & Noble Nook and Apple iOS. You can purchase a print copy at the same Amazon link above for $9.25.
Thank You for Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure AFFT is paid ever larger amounts from people paying for us to send their offers to our Supporters.
Again, we are making every effort to ensure we work with only reputable companies. If you feel any FAIRtax-sponsored email is objectionable, please email us and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FAIRtax strong!
Respectfully,
Steve Hayes
Chairman, Americans For Fair Taxation
When Congress and The Swamp tell us a tax benefit is for a good purpose only uncaring ogres could oppose, immediately raise the red flag and be very wary.
Who could possibly object to tax benefits given to landowners who enter into agreements with land trusts or government agencies to donate an easement which permanently protects important conservation resources?
It works this way. If the land is worth $10,000,000 if used to build homes and $2,000,000 if the landowner gives up the right, the landowner can deduct $8,000,000.
This tax benefit was enacted in 2006 and was made permanent in 2015. The donor can take a deduction for the value of the easement and use it to shelter up to 50% of their income in the year of the donation and carry forward any unused portion for 15 years. When the donor of the property is a Farmer (someone who makes more than 50% of his income from farming or ranching), then the Farmer can deduct the amount of the donation to shelter 100% of their income and carry any unused amount forward for 15 years.
For example, you own a tract of land which would be a great conservation area and you grant a permanent easement to a state agency. The value of the easement is $1,000,000. If you are making $100,000 per year, then you will reduce your taxable income by $50,000 per year 2019 and every year thereafter for 15 years. If you are in the 30% income tax bracket, you will save $15,000 per year for 15 years for a total of $225,000.
What’s Not To Like About This Arrangement?
This IRS section was quickly used by promoters of tax shelters. The promoter acquires a piece of land, obtains an appraisal saying the land is worth up to 10 times what they paid, sells interests in the land to investors and creates a vehicle allowing these investors to deduct between 2.5 and 10 times what they invested in land conservation deductions.
Here is an example of the benefit a high-income Individual earning $500,000 per year and in a 37% federal income tax rate can obtain. Assume the earner invests $1,000,000 in one of these projects and is able to deduct $4,000,0000 (a conservative example because many of these packages offer even larger deductions).
Year 1, the Individual’s taxable income will be reduced from $500,000 to $250,000. The $5 million total will be reduced to $4.75 million. Assuming income continues at $500,000 for the next 15 years, the earner can reduce his taxable income by $250,000 each year for deductions totaling $4 million. If the earner’s federal income tax rate stayed at 37%, then the earner will save $4 million x 37% = $1,480,000. This is a profit from tax savings alone of $480,000.
Because of criticism in the Wall Street Journal and other financial publications, the IRS decided there might be something wrong. They now require promoters of these schemes and their investors to provide disclosures to the IRS. This has prompted the promoters of these schemes and their clients to hire people in The Swamp to lobby Congress to keep the IRS from cracking down on these schemes.
According to a 3/14/19 Wall Street Journal article by Richard Rubin, from 2010 - 2016, taxpayers deducted $20,000,000,000. Since many of these investments allowed investors to deduct multiple amounts of their deductions for up to 15 years, the real story is the true cost to the government is many times more in lost taxes.
Senator Daines and Senator Stabenow introduced Senate Bill 170 limiting the deduction amount to 2.5 times the investment.
Senator Grassley and Senator Wyden, the chairman and ranking member of the Senate Judiciary Committee, are now going to hold hearings. This will prompt more $ to lobbyists and more $ to purchase tickets to fundraisers held by the Members of Congress.
These actions in the Senate will generate more $ to The Swamp from the tax shelter promoters and more contributions to the “influential” Senators.
Who Loses?
The answer is simple. Almost all American taxpayers. The billions of dollars being saved by the tax shelter investors has to be made up by the rest of us or by increasing the national debt. There is no other way to make up the lost revenue.
Most all Individuals favor conserving land. However, it shouldn’t be accomplished by making laws and regulations providing incentives to only some of us through the income-payroll tax system.
Doesn’t it make more sense if we want to encourage conservation to just raise the money in the most economically efficient manner which doesn’t attempt to legislate winners and losers? Of course it does. How? With The FAIRtax, the only “Fair Tax”. Then when Congress has the money, let them decide how to best encourage landowners to grant conservation easements. Then at least it’s not hidden.
Conclusion
Like with most “special provisions” of the income-payroll tax system where The Swamp and Congress hope no one questions their motives, the 1st thing we have to ask is, “What’s in it for them?”
We have learned the only thing motivating The Swamp and their allies in Congress is doing something benefitting them either with money now or with the opportunity to make more money later. They like nothing more than making people beholden to their actions because this keeps these people who got the tax break motivated to keep paying and paying to The Swamp and to their allies in Congress.
Why reward this type of behavior? Why permit the way we collect taxes to fund the government be an auction system where only the wealthy and well-connected participate?
The author George Bernard Shaw said, "You see things; and you say “Why”. But I dream things that never were; and I say “Why Not”.
We say to you President Trump, “Embrace The FAIRtax and real tax reform! Stand up to The Swamp. They will oppose you anyway because they see you as a threat. What have you got to lose?”
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future: “If you want a picture of the future, imagine a boot stamping on a human face—forever.”
Take Back America! Pass The FAIRtax Now!
Online Resources
These links will help you promote and support The FAIRtax. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
Americans For Fair Taxation - Home Page
Americans For Fair Taxation - Facebook Page
Americans For Fair Taxation - YouTube Channel
Americans For Fair Taxation - Twitter Page
Americans For Fair Taxation - Chairman's Report Podcast on Spreaker
Americans For Fair Taxation - Chairman's Report Podcast on Apple
Americans For Fair Taxation - Chairman's Report Podcast on iHeart Radio
Official FAIRtax Logo Store
The FAIRtax Guys - Home Page
The FAIRtax Guys - Facebook Page
The FAIRtax Guys - YouTube Channel
PopVox - The People’s Voice On All Things Legislative
Read Evasion Study Summary
The FAIRtax Guys
Ron Maiellaro & Bob Paxton perform their FAIRtax Power Digital-TV Show & Podcast. When the show streams to Facebook, The FAIRtax Guys plus a few AFFT experts are responding “live” to your comments and questions. A free app is available for iOS and Android.
Digital TV: Tues-8PM-ET Americans For Fair Taxation - Facebook Page
Digital TV: Wed-7PM-ET The FAIRtax Guys - YouTube Channel
Podcasts: Fri-6AM-ET Posted on Spreaker, Apple Podcasts & iHeart Radio.
Digital TV & Podcasts are available on The FAIRtax Guys - Past Shows
This week's Episode #169 - "How Money Walks"
People vote with their feet and take their money with them as many states with income taxes are discovering. Using the website How Money Walks The FAIRtax Guys demonstrate how people and their earnings are walking away from high tax states, states with an income tax, and migrating to more tax friendly states including states without an income tax. Figures don’t lie!
Same applies to countries. You will be amazed at the number of iconic companies that we associate with America who no longer reside in America. Why? Very simple - the convoluted, complicated and costly income tax code system. The FAIRtax Guys give proof showing how onerous tax codes drive people and businesses away.
So what is the solution to this problem? You guessed it. The FAIRtax!
Recent comments from viewers encouraged The FAIRtax Guys to relaunch the “Slogan Contest”. There is a lot of talent in the viewership and The FAIRtax Guys would like to use some of that talent to come up with a catchy slogan that helps get the message out. America loves slogans. So get involved and “slogan away”. Click "Here" to email us your favorite slogan about the IRS.
Enjoy this episode and please Share it with others you know. We need a ground swell of supporters to make this happen.
What Can Each Of Us Do?
Call the local and DC offices of your Representative and 2 Senators. Use the following script:
- I am sure Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income-payroll taxes over the next 10 years.
- Since most will say they don’t believe their boss has seen the study, drop off a copy, email a copy or click Read Evasion Study Summary and copy/paste the link into an email.
- Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion.
- In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law.
- They probably will say their boss believes simplifying the income tax will handle the problem.
- Explain, when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So, it’s unlikely they are going to pay 30-40% when they were paying 0% because they have already decided it’s okay to cheat.
- Say, the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year.
- Point out Evaders do not self-identify by putting an “E” on their income tax return.
- 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well.
- Ask if the Member is in favor of this?
- If they say no, then ask again how the Member proposes to stop people breaking the income tax laws.
- Then explain the way to handle evasion without unleashing the IRS audits is The FAIRtax.
- If you meet with your Representative or attend a town hall and ask these questions, you will be even more effective.
American's Big Solution - The FAIRtax Primer America Needs
Hard to believe but there still are people who have not heard of The FAIRtax. For those people, America’s Big Solution provides a starting point in their study of The FAIRtax and is meant for any age.
America’s Big Solution is an introduction to The FAIRtax written by Terry Tibbetts, author of “A Spartan Game: The Life and Loss of Don Holleder”, with help from Ron Maiellaro, President The Florida FAIRtax Educational Association. You can buy an electronic version for only $2.99 for the Amazon Kindle, the Barnes & Noble Nook and Apple iOS. You can purchase a print copy at the same Amazon link above for $9.25.
Thank You for Opening The FAIRtax Chronicles, Our Sponsored Mailings
We plan to do several of these mailings each month. If you take a minute to open the sponsored emails and click through to the website, you are making an in kind contribution to AFFT. It is not required to actually make a purchase, but your minute of time will ensure AFFT is paid ever larger amounts from people paying for us to send their offers to our Supporters.
Again, we are making every effort to ensure we work with only reputable companies. If you feel any FAIRtax-sponsored email is objectionable, please email us and tell us why. You can also opt to not receive these sponsored email messages but still receive FAIRtax emails.
Thank you for staying FAIRtax strong!
Respectfully,
Steve Hayes
Chairman, Americans For Fair Taxation
Help FAIRtax Become The Number One Issue in 2021
Enacting the FAIRtax must be a prominent topic in these times. We did it before, we can do it again, but we need your help!