Joe Pitts, May 2, 2003

A little over a year ago a recently-married couple moved to Oxford, Pennsylvania to escape city life. After years of living in cramped surroundings they were eager to find a place to settle down, own some land, and start a family.

The house they picked was surrounded by farmland and their new neighbors assured them that would not change anytime soon. But the price offered by developers soon began to outweigh the cost of maintaining a farm and the taxes that were accumulating for future generations. So these farmers have begun to put their farms up for sale.

There is no indication what if anything will replace these farms, but the story is a familiar one in our area.

The district I represent spans all of Lancaster County, a good portion of Chester County, and parts of Berks County. In all three counties I have watched as new developments have sprung up absorbing what was once open space – farmland, forest, or open field.

On the one hand this is a sign of healthy economic growth and expansion. Our area is a good place to do business and a great place to live. We are close to everything you might want - mountains and beach, city and country.

But on the other hand the rapid expansion is a sign of something far more challenging at work. As farmers leave and housing developments spring up, more and more will be demanded of the resources in our area. More water will be needed. More electricity will be needed. More of everything will be needed, stretching township resources thin and forcing some even to raise taxes.

Because our area has been developing so quickly, land isn’t as plentiful as it once was. This has driven up the price of land and real estate taxes, exerting a tremendous burden on our farmers.

But there is a greater danger to farming in our area: estate and capital gains taxes. Farming, more than most professions, passes from father to son. Some farms in our area have been in the family for centuries.

Farmers work day and night to build a successful business with the intention of passing it on to their children. But when a farmer dies and leaves his farm to his son, he discovers that the estate tax – which ranges from 18 percent to 60 percent – combined with capital gains taxes – recently reduced from 28 percent to 20 percent – is applied to every thing that holds value, from the farm house to the land around it.

Most farmers in our area are "land rich" but "cash poor," having no way to pay these devastating taxes without selling land, usually to developers, ending a family business and a way of life.

Now, I am a proponent of economic growth. I know that economic growth creates jobs and builds wealth for every American. If a farmer decides that selling his farm is best for the family, then by all means he should do it.

But no one should be penalized for being successful. And no one should be taxed out of a way of life.

There is a solution however. There is a way to preserve what farmers and so many of the residents of Pennsylvania enjoy so much about our area – open space.

The Open Space Preservation Act is a bill I have introduced in previous years. This year I introduced it on January 7 as H.R. 159. It would exempt farmers who pledge to keep their land in farming from the Capital Gains Tax.

It would be a good and practical way to preserve open space in our area without jeopardizing the economic vitality of our area. And it would preserve a way of life that has existed in our area for hundreds of years.

The Capital Gains Tax has become a major incentive for young people to walk away from their family farm because it simply is not worth it to build up a farming business only to have it taxed away.

This just isn’t right. It is not a fair choice for our farmers and it’s not a way to preserve some of our most treasured resources.

Congressman Joe Pitts represents Pennsylvania’s Sixteenth Congressional District, spanning all of Lancaster County and parts of Berks and Chester counties.