[Congressional Record Volume 167, Number 164 (Wednesday, September 22, 2021)]
[Senate]
[Pages S6602-S6603]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            Iowa Land Prices

  Mr. President, now I would turn to one other point. If anybody is 
waiting to speak, it is a little shorter than what I just stated.
  I want to make it a priority--or I do make it a priority to keep in 
touch with my Iowa constituents, 2.3 million of them. I listen to their 
thoughts and concerns. Now, that could be on my 99-county tour meetings 
that I hold every year for 41 years in a row now that I have been a 
Senator for Iowa, or it could be during the match-up of Iowa State 
versus my alma mater, Northern Iowa football. In either case, I meet 
with Iowans where they are and listen to what is on their mind.
  During this past State work period, I had multiple conversations with 
farmers about what is on their minds. At the UNI-Iowa State game, I had 
a conversation with a friend but also a fellow farmer, Ron Heck. He 
farms near Perry, IA, where he talked to me at this football game about 
concerns about President Biden's tax plan.
  Ron followed up with an email to me, which I want to share with my 
colleagues on the floor since this is a theme that I have consistently 
heard across the State.
  At the end of my speech, Mr. President, I ask unanimous consent that 
this email be printed in the Record.
  I am going to refer to parts of that email, but I think you ought to 
hear it directly from Ron Heck, so that will be at the end. Just read 
it.
  Here is my summation of it. Ron started the email by saying:

       Iowa farmers have a problem with exploding land prices, 
     coupled with Biden's increasing death and transfer taxes.

  But to quote further:

       A . . . tax at death or transfer can't be paid back by 
     younger working farm families. Young Iowa farmers would 
     become feudal servants to banks and landlords from outside 
     the state.

       There are many cliches and articles written about this. I 
     have seen some that don't seem to grasp the problem.
  For those who didn't grasp the problem that these taxes might cause, 
Ron highlighted some key statistics on the lack of available Iowa 
farmland. You understand, God only made so much farmland.
  Quoting again:

       . . . in Iowa, from the third quarter of 2020 through the 
     second quarter of 2021, CARD [the Center for Agricultural 
     Rural Development] at ISU [Iowa State University] says 
     181,046 acres of Iowa farmland has been ``available on the 
     market.'' Out of about 30 million crop acres, this is 0.6% in 
     a year. Everyone knows that it might be 100 years before any 
     one parcel is available again, so ``you need to buy it now'' 
     is always said by the auctioneer. A Des Moines Register 
     article on June 28, 2018, by Donelle Eller says that only 
     ``7% of Iowa farmland (owners) intend to sell to a non-family 
     member.''

  Ron made this point to show that public auction prices are high 
because of the scarcity of available farmland for sale. These prices 
should not be used for family tax-transfer valuations for taxation. 
But, of course, they would be under some of these ideas coming out of 
the White House.
  Ron continued with facts on the price of this farmland:

       Outsiders believe the value is there, but in fact, farm 
     families don't want to sell, so the auction price goes up.


[[Page S6603]]


  Ron said that, in August, there were 40 Iowa farmland auctions, with 
most of the sales between $10,000 to $16,000 an acre.

       Assuming a ``taxable'' gain of $10,000 per acre, Biden's 
     taxes could be $4,400 per acre.

  Ron told me that, ``At a minimum, this would be a $200 per acre cash 
rent for 22 years to the U.S. Government, all payable in advance.''
  He added: ``This is `confiscation, not taxation.' ''
  Ron said: `` . . . since the $4,400 must be paid for in after tax 
dollars, it would actually take double this amount to pay it back. 
Interest charges could make the payback period more than 50 years, just 
to pay the U.S. taxes.''
  Ron finished his email by saying:

       It doesn't take much outside money to raise havoc with Iowa 
     farmland auctions, and therefore estate or transfer taxes 
     will ultimately destroy Iowa's farm culture.

  Ron, thanks for taking time to write to me so I can tell your story 
to my colleagues in the U.S. Senate. It is my job to respond to 
comments and do something about it.
  I want to urge my colleagues to join together and oppose changes that 
will impact family farmers and small businesses, generally. Most 
importantly, of those families which we were just told in Ron's 
statistics, 93 percent of the farmers want to pass it on to the next 
generation. That might be true of small businesses as well.
  These Iowa farmers, just like farmers around the country, feed and 
fuel our country and the world. Only 2 percent of the people in this 
country provide food for the other 98 percent. Ensuring that the next 
generation of farmers are able to keep the land in their family is in 
our national interest.
  If you want to preserve the family farm, then you can't let it be 
taken away by these Biden tax proposals. These tax-and-spend proposals 
will be bad for small business, for farmers, and for all Iowans.
  Mr. President, at this point I ask unanimous consent that the entire 
email from Ron Heck be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Jennifer, you and I have not met. I talked to Senator 
     Grassley at the ISU/UNI football game last week. He asked me 
     to send an email to you about our conversation. He will 
     recognize my name.
       Iowa farmers have a problem with exploding land prices, 
     coupled with Biden's increasing death and transfer taxes. As 
     the Senator said to me, the result is ``confiscation, not 
     taxation''. A 44% tax at death or transfer can't be paid back 
     by younger working farm families. Young Iowa farmers would 
     become feudal servants to banks and landlords from outside of 
     the state.
       There are many cliches and articles written about this. I 
     have seen some that don't seem to grasp the problem, and some 
     that are pretty good. I'll do some math about Iowa grain 
     farmers that might be helpful. I know the Senator doesn't 
     need to be convinced that the proposed taxes are wrong. He 
     might find some of this useful:
       In the last year in Iowa, from the third quarter of 2020 
     through the second quarter of 2021, CARD at ISU says 181,046 
     acres of Iowa farmland has been ``available on the market''. 
     Out of about 30 million crop acres, this is 0.6% in a year. 
     Everyone knows that it might be a 100 years before any one 
     parcel is available again, so ``you need to buy it now'' is 
     always said by the auctioneer. A Des Moines Register article 
     from June 28, 2018, by Donelle Eller says that only ``7% of 
     Iowa farmland (owners) intend to sell to a non-family 
     member''. POINT: Public auction prices are artificially high 
     because of scarcity and should not be used for family tax 
     transfer valuations for taxation. Outsiders believe the value 
     is there, but in fact, farm families don't want to sell, so 
     the auction price goes up.
       Forty current Iowa auction prices from Aug 20 to Aug 27 
     were from $7400 to $22,600. The $22,600 included a wind 
     turbine that was bring in about $400/acre in payments, so 
     that one doesn't count. Still, most of them were $10,000 to 
     $16,000. Assuming a ``taxable'' gain of $10,000 per acre. 
     Biden's taxes could be $4,400 per acre. At a minimum, this 
     would be a $200 per acre cash rent for 22 years to the US 
     government, all payable in advance. This is ``confiscation, 
     not taxation''. Actually, since the $4,400 must be paid for 
     in after tax dollars, it would actually take double this 
     amount to pay it back. Interest charges could make the 
     payback period more than 50 years, just to pay the US taxes.
       Farmdoc from the University of Illinois has many articles 
     showing the return to land and the farmer. They include crop 
     and government revenue, and subtract all costs except rent 
     and family living. The number is variable, but usually the 
     landlord and tenant have about $300 to split as they choose. 
     Iowa State has similar numbers, but Illinois has a better 
     presentation.
       So, if farmers can't pay these prices, doesn't this all 
     work out with lower land prices? Nope. For one thing, there 
     is a boom and bust in Iowa land prices about every 50 years 
     (1930, 1980, 2030?). Booms, or bubbles, are caused by a bad 
     combination of money, credit, and attitude. What could be the 
     problem now? Of course one is the cheap and easy credit. With 
     10 year T-bill rates around 1%, and everyone ``knows'' you 
     can't lose money on farm land, a $240 cash rent on $16,000 
     land at first glance is a 1.5% return. Everyone ``knows'' 
     that government programs guarantee that farmers will pay the 
     rent (have you seen the movie ``The Big Short'' about the 
     housing bust?).
       What about an outside billionaire getting excited about 
     carbon sequestration, or getting nervous about the stock 
     market? The 181,046 auctioned Iowa acres last year if they 
     were $14,000 per acre would have been $2.5 billion dollars. 
     Bill Gates is now the largest farmland owner in the US. Back 
     to my point: it doesn't take much outside money to raise 
     havoc with Iowa farmland auctions, and therefore estate or 
     transfer taxes, and ultimately destroy Iowa's farm culture.
  Mr. GRASSLEY. I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Ms. ERNST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.