Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Monday 01/14/13

Dazed by Capital Gains Rates
If you're confounded by income tax changes under the new tax changes, you're not alone. Capital gains rates may be one of the more convoluted calculations you'll need to consider starting in 2013.[Read Full Blog Post]
Posted at 4:19PM CST 01/14/13 by Marcia Zarley Taylor | Post a Comment
Comments (22)
Appears to me if Ma and Pa Kettle have an auction sale, the gov. starts grabbing at 250k. If they divorce, live in sin, they can have the same sale and not donate to Obama untill the 400k figure is reached. So much for family farming!
Posted by Bonnie Dukowitz at 7:17AM CST 01/15/13
And if they're SUCCESSFUL, living in sin gets $800K versus $400K for being married. Perhaps POTUS should divorce, but keep living with Michelle to "lead by example", right, Bonnie? (It boggles the mind.)
Posted by Ric Ohge at 9:47AM CST 01/16/13
Only the government could create such a convoluted mess as our tax system.
Posted by tom vogel at 7:50AM CST 01/17/13
For those of us blessed with hind-site, I wonder if retroactive divorce to last year could be added as an executive order by Mr. Fix-It, prior to the filing deadline. In most cases, women are involved in marriage, maybe an out of court settlement on a discrimination suit is in order.
Posted by Bonnie Dukowitz at 7:00AM CST 01/18/13
"The effect of higher capital gains could be to encourage elderly landowners to hold on to property rather than sell for cash now." That was already happening prior to Jan. 1st, 2013. That's the biggest reason why young people cannot get into farming, the government encourages the elderly to hang onto their land until death. Charge the same capital gains while a landowner is alive and when they are dead, and more land would come onto the market making it possible for new or younger farmers to purchase the land and make a living.
Posted by T S at 7:58AM CST 01/18/13
I just cannot grasp why government officials think they are entitled to what we have worked so hard to gain. Throughout life, we have paid our dues. We are penalized for staying married, thru thick and thin, raising our children, growing a huge garden to provide nourishment, turning off the lights in the areas not occupied, turning down the thermostat and putting on a sweater. For donating to 4-H and FFA. Rather than leaving the union, it may be the time to give D.C. to Moscow, but that may be cruel and unusial punishment.
Posted by Bonnie Dukowitz at 7:52PM CST 01/20/13
Bonnie, ESPECIALLY when it comes to Government, it DOES seem more and more "no good deed goes unpunished."
Posted by Ric Ohge at 9:56AM CST 01/22/13
You live in a country where you can make unlimited $ with essentially no personal threat and know your offspring actually have a chance of enjoying the majority of your good fortune. Thousands have died to procure that for you. And for that you are unwilling to pay any taxes to support this effort however fallible? I suggest Bonnie, your hard work efforts to cause the value of an acre of land and corn/soybean prices to rise several hundred percent over the decade have been minimal. Paying a few percent of capital gains is not deserving of all your vitriol. What obligation do you or your AFB fellows have to this country? Is just living out your life avoiding obligation on a government subsidized farm the the only weight you should carry?
Posted by Don Thompson at 3:16PM CST 01/22/13
You are correct,Don, in the first part of your post. However a few percent is not descriptive at all. But how do you come to the conclusion I am opposed to taxes. I support the taxes needed to support the various government programs which are essential and cannot be provided for within the free enterprize system. The success of this nation is do to the opportunities we have because of freedom from government interference in the pursuit of happiness, not the government controlling and taking the proceeds at every opportunity. And yes, my income tax, sales tax, property tax, medicare tax, required permit and license fees, do I need go on, are ongoing. I am concerned with your personal threat reference. Don't pay any of the above and see what might happen. I do not want to know.
Posted by Bonnie Dukowitz at 8:14AM CST 01/23/13
Capital gains taxes, estate taxes, gift taxes, do not just affect farmers it affects every American. Anyone in America can by a stock option, hold it for years, and sell it at an appreciated value. Most people in America do that via retirement accounts or just simple investing. Any change to the tax structure affects these people as well as farmers. It may seem like some taxes unfairly affect farmers more than other Americans, but when you think about the millions upon millions of people in America, you realize that taxes are paid by everyone, not just farmers. If the tax code is changed to benefit farmers, that would be unfair to the rest of America. Farmers do benefit more from government subsidies than the middle class does, so I would get too snippy about sending our government officials off to Moscow. This is a free country, you are free to leave it if you don't like it.
Posted by T S at 9:30AM CST 01/23/13
You are absolutly correct, T. S. Thanks for making that point. I wish the press would make that news worthy. Business is business, taxes are taxes, whatever enterprize one is engaged in. As it is, agriculture is singled out as the bottomless pit of benifits in the USA. I hope one can continue making comments, "tongue in cheek" to make a point without being looked upon as demented and anti-American, then deported. The reference of Moscow was aimed at such things as Khrushevs' comments to the U.N. and later to President Kennedy. Sometimes snippy and snarky gets the conversation on a roll. Only in America do we have this right.
Posted by Bonnie Dukowitz at 10:00AM CST 01/23/13
Bonnie, I can assure you you will not be deported from the USA for speaking tongue in cheek even if you are demented and anti-American. Laws and taxes are always in dynamic process. Paying taxes and seeking intelligent improvement in a civil manner is the privilege of living in America.
Posted by Don Thompson at 6:32PM CST 01/23/13
So one with a different point of view, Don, is anti-American. The jest of your contribution did indicate stark disagreement. I am not trying to display a bitter viewpoint at all. Just the fact that overgrown government has always been paid for and will be paid for by the taxpayers. There has been many years in which we have survived the loss in value, no income, all while government still took much more than a few percent. If only I had in the cream can the total of what I have paid the various levels of government over the years, the few% you reference would be miniscule. Although I do not fit that bracket, 40% is much more than a few % to me. The problem is, When is enough, enough?
Posted by Bonnie Dukowitz at 11:03AM CST 01/24/13
Bonnie, Wikipedia has a thorough discussion of "irony" available online. If you review that and then read again my post that you reference, you may have a different interpretation of my opening sentence. I agree that some parts of government are bloated while others are starved. For example, you may have heard during Secretary Clinton's appearance before Congress that there are more military band members than foreign diplomats serving this country. How crazy is that?
Posted by Don Thompson at 9:19AM CST 01/25/13
Kind of like the British with their drummers leading the infantry to battle, Don. Which is in a way, my point. Keep giving them the money, the more music we hear. I did reread the first line, Thanks
Posted by Bonnie Dukowitz at 9:43AM CST 01/25/13
The changes to the captial gains tax are numbingly complicated, and the rate increase will inhibit land sales during farm retirees' lifetimes, which is not a good thing. It's ludicrous to put gains on stock sales held only a year in the same category as gains on land sales after a working lifetime for tax purposes. I do see justification for the tax increases on relatively short term (one to five year?) capital holdings, but the tax rate should have been left alone on gains of over five years. Still, what we see is what we get on capital gains taxes---probably for a number of years---in view of the how hard it was to get the recent increases through Congress. Farmers and their spokespersons would be better off not attacking capital gains rates directly. Instead they should work with Congress to develop a new IRA type account open to farmers and other small business owners to be funded with assets they sell at retirement. As an option to paying an immediate captial gains tax they should be able to put their capital sales proceeds into the IRA to be taxed at ordinary rates as the funds are removed for living expenses over a period of years. Most farmers place a priority on building their farm operations first, before funding IRA's helping somebody else's business. Let them do their IRA funding as they retire.
Posted by Thomas Runholt at 1:28AM CST 01/26/13
Thomas, How about getting government mandates and spending under control? Would that not eliminate the claimed need for tax breaks/incentives for the best kissers of politicians and bureaucrats? Kind of what Rep. Peterson from Minnesota proposed for the E.P.A. Defund it! How about defunding tax exempt, private, non-profit organizations such as EWG, AHUS etc. While your suggestion has merit, mine is much more simple and more efficient to administer. Eliminate 80 or 90% of the IRS as well as the menagerie and the government would increase revenue. A flat income tax, business or personal, not both, whatever rate, without deductions.
Posted by Bonnie Dukowitz at 6:11AM CST 01/28/13
Our current tax code through estate planning offers alternatives to pass the farm assets on to succeeding generations and limit capital gains taxes. The 5 million exemption on estate taxes is pretty generous. Let's not forget that most people work hard. Most have not had the benefit of a capital asset as part of their business rising in value. We would not want to do without these dedicated individuals such as teachers, police, and service workers who have had their retirement accounts defunded so that others in the society can pay lower taxes.
Posted by Don Thompson at 8:34AM CST 01/28/13
Yes, you are correct Don. Only if the tax code were as simple as your summary. I would just guess those in the capitol gains brackets have paid dearly in taxes. Now have to spend a small fortune to keep from not paying more. I believe, I have only read about it, the defunding you reference is only part of what the tax payers were on the hook for. What the individuals contributed to their own future is still intact. They too, had the option of investing for their retirement. Even with the decrease in benefits, these funds are in terrible financial shape. Wisconsin, Minnesota and Illinois are billions short of balancing the books on these funds. I do not have any objection whatsoever to individuals reaping the rewards of what they have sown.
Posted by Bonnie Dukowitz at 6:41AM CST 01/29/13
I am not a fan of a simple tax code, Bonnie. I like options and flexibility but I would never assume that someone who is in a high tax bracket now has always paid significant taxes or vice versa. Our tax code, just like our EPA rules came about for a reason but are always subject to tweaking. So let's tweak where needed. Life is not that simple nor should it be. Enjoy the ride.
Posted by Don Thompson at 8:37AM CST 01/29/13
If the tax code were simple, we could assume everyone would pay something. Flexible is only benificial to those who have enough to develope a means of avoiding a tax liability.
Posted by Bonnie Dukowitz at 9:24AM CST 01/29/13
Read some comments on the virtue of Big Government spending on the blog here. This after I just read one more mind numbing article of the never ending waste and disrespect for hard working taxpayers...included in bottom of this email. I suspect many of the Big Government supports will...well support her abuse of our tax dollars...I always wonder when I read articles like this...I wonder how much it would have cost if she was spending her own money instead of taxpayers money. To most in Big Government, they spend our money as "public servants" (wonder who really is the servant here) as if it were monopoly money. Most of the big spenders will never have enough of our money. If they confiscated all our wealth, it would suffice for one yr (they would wet they pants in excitement...as I think of George Will's comment..."the reason Government will never have enough money is because next to sex...its most enjoyable to them to spend OTHER PEOPLES money) but as reliable as the sun coming up then next day, so reliable is Big Government to spend more than they take in. I think of Ms Thatcher's comment "the trouble with spending everyone elses money...is that sooner or later you run out of everyone else's money'"...and I might add...there desire to work when it will just be confiscated from them to spend on themselves or pork. But to those on this blog that think Big Government is entitled to it all...I suspect you would like on of Carl Marx's comments "there is only one way to kill capitalism; by taxes, taxes and more taxes". I wished those that want more Big Government spending would put their money were their mouth is by setting up a web page where people could go to voluntary send in all their money, encourage others of their mindset to do the same and they can feel "so good" about themselves handing it over to Big Government and lets watch the deficit drop. Put up a chart showing just how well that is working for all to see! Now please read the following news clip and show your support. Knowing that this is just "dust on the scale" of everyday Big Government activities the "Government elite" are entitled to. We need common sense taxes to support the military etc of what Government was intended for, but Big Government left to itself will drink itself "drunk" on endless spending and waste. There is not one person with basic common sense who can not see that. Congresswomanâ?™s Round-the-World Trip Cost Taxpayers $23K The House Judiciary Committee reported Rep. Sheila Jackson Lee, D-Texas, traveled around the world on an official trip in February that cost $23,646. The Feb. 16-22 trip on commercial flights was to Korea, Vietnam and Cambodia. Jackson Lee did not travel over or back with CODEL Landrieu that included several members of the Congressional Coalition on Adoption. The delegation was to meet with local community leaders, adoption officials, and other government officials, such as the Vietnamese Ministry of Justice and the Ministry of Labor, Invalids and Social Affairs.Jackson Lee took commercial flights over and caught up with the delegation in Seoul, South Korea. After visiting South Korea, Vietnam and Cambodia, she then left the delegation early for her return commercial fight through Frankfurt, Germany. The trip costs included $19,970 for transportation, $1,292 for per diem and $2,385 for other purposes.
Posted by dick suwyn at 7:37AM CDT 04/30/13
How to Be a Rational Investor
Good Iowa farmland has been selling for $15,000 an acre and up this winter. That's rational only if you are willing to settle for miserly rates of return.[Read Full Blog Post]
Posted at 10:25AM CST 01/14/13 by Marcia Zarley Taylor | Post a Comment
Comments (1)
I was looking at a tilt top tea table the other day, a 1760 era table to be auctioned by Sotheby,s. Estimated at 150-300,000$ plus a huge buyers premium and sales tax. I would suggest that all thing are not purchased with a return in mind but rather with a passion for ownership. Those fortunate enough to spend that kind of money on farmland in Iowa, perhaps should be appreciated for their passion. Skip the analysis, please
Posted by james earl at 6:44PM CST 01/24/13
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