Statehouse Headliners: Capital gains tax could fall on woodlot owners

By Guy Page

A proposed Senate change to a House tax bill could make timber harvesting more expensive, with serious longterm impacts on Vermont forestland sustainability and the state’s $1.5 billion forestry products industry.

Guy Page is affiliated with the Vermont Energy Partnership, the Vermont Alliance for Ethical Healthcare, and Physicians, Families & Friends for a Better Vermont.

H.541, a revenue bill, would (among other measures) boost capital gains taxes by reducing the sale amount permitted for exclusion from 40 percent to 30 percent and adding a $450,000 cap on the exclusion. A recent proposed change would eliminate a House exemption for large sales of timber. If approved with this change, H541 would likely go to a House/Senate conference committee for resolution.

Many Vermonters think capital gains taxes are a headache suffered only by rich people with big stock portfolios. The timber tax increase would further burden a rural Vermont industry already challenged by a shrinking workforce, increased worker compensation costs, overseas competition, and declining demand for Vermont wood from the printing, furniture and construction industries. Still it supports about 10,000 mostly rural Vermont jobs, and by helping the forest recreation industry supports another 10,000 jobs, the Vermont Sustainable Jobs Fund said in January 2018.

Furthermore, trees are perhaps Vermont’s greatest carbon dioxide reducer. One acre consumes the Co2 equivalent of emissions by 62 vehicles, the Vermont Department of Forest, Parks and Recreation reported in 2016. Vermont forests store or “sequester” 1,758 million metric tons of Co2. Vermont’s total annual output of Co2 is about 8 million metric tons, the 2016 report said.

A spokesperson for the Vermont timber industry said Wednesday:

  • For almost all forest landowners, taxes are the highest costs to holding forestland.
  • This proposal can increase the tax on a timber harvest by as much as 30 percent.
  • Landowners need stability on tax policy to be confident in their long-range forest management planning. This change can force a change in the planning horizon, perhaps jeopardize sustainability.
  • The likelihood of forest fragmentation – selling and developing parcels of Vermont forestland – would increase with the holding cost of forestland. This tax increase could cause a landowner to lose enough investment value in forestland ownership and then decide to fragment his/her holdings.
  • This tax will penalize people who have held and managed their land for longer periods of time – including land-rich, cash-poor rural Vermonters

Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.

Image courtesy of Michael Bielawski/TNR

22 thoughts on “Statehouse Headliners: Capital gains tax could fall on woodlot owners

  1. The Power To Tax…
    Tax the Oxygen consumers for the amount of CO2 emitted as byproduct.
    Tax the CO2 consumers for the photosynthesis products produced.
    Soon a Nitrogen Tax? About guaranteed, once some genius figures out how to meter use.

  2. Thanks Neil , from a guy that has great insight and values. Enjoy your writings, comments and TNR articles. You should be on the TNR staff. My problem is that perhaps TNR has a limited audience (unknown by me as to the scope). Oh well, Sometime a coffee should be in order. I’m in Townshend. I like to be brain challenged.

    TNR articles inform in reality what’s happening to the once great state. Being born in 1939 day before Hitler invaded Poland, up until the 1960, when the Flatlanders took over to take the state “forward”, it’s downhill since. Ah Phil Hoff, the start of evil and the screaming BS artist Dean and more since.

    The major issues are, why and how did these Flatlander people came and sought the governorship?
    Since Hoff, it’s been downhill. The R’s had to placate to the Legislative D’s as with Scott.

    • LOL Gotta love the historical benchmarks. Me, just a relative kid born 37th anniversary of Kitty Hawk, married first time to a woman born 13 months, to the day, after Hiroshima. Too many 13’s after that… Became a confirmed triskaidekaphobe.
      Politics.. How can anyone in good conscience try to convince another that the horse donut sandwich they just sold ’em is actually tasty good? Gets tiresome. ‘Where do they come from’ has to be the indoctrination centers. Hindsight shows me the signs were there even before 1960; remember that the public school system came about c.1890–blame John Dewey’s Progressive Education activities for the rest. It continues today.

  3. Should Vt, rather Vt forest owners,. sell ‘carbon credits” from our huge forests to NY City to cover some of the City’s Carbon mon-noxide and and it’s carbon di-oxide?

    THAT would do a lot for our budget – BUT the prog’s in legislature would grab all that money and spend it elsewhere for additional state jobs.

  4. One of the great unsovled mysteriies to me is with all the discontent with the folks in Monepier is how do they keep getting elected and reelected. Am I missing something?

    • Socialists in VT will vote for Socialists regardless of policy. The voting Socialists are numb and dumb to reality. If a D is in the ballot–that’s my guy or gal.

      I’ve suggested that a Conservative (or other such type of person) don’t run as a R, but as a D. Good chance to get vote in. Then when in the state gov, vote conservative on the bills. Perhaps the Socialist voting dummies unwillingly saved the state.

      Then if challenged by the voters why they voted conservative, lie and say “that’s what my constituents wanted”. The stupideos won’t know. Simple.

      Liberals / Socialists have limited education, many don’t know the alphabet beyond the letter D.
      As many D/S/L politicians have said, “we’ll lie, cheat, steal to get appointed”. Why not follow suit?

      • That’s what I blurted out talking to myself a week or so after elections, but it probably wouldn’t work, the reigns are held very tight in the DNC camp. Unless you are a strong incumbent they will replace you immediately. Look at all the grief they gave Senator Rogers for doing his duty, defending the constitution (2a) with common sense and truth.

        No the real problem is we allow them to frame every conversation. There is a saying I’m sending you out to the wolves… need to be as clever as a snake and as innocent as a dove. Note…..NOT BE A SNAKE, which some politicians have elevated to an extreme art form on both sides.

        No we need to not take the bait with a knee jerk response EVERYTIME the Now Prssc put out the red meat. For example…..carbon tax. When we say no carbon tax we’ve fallen for their trap every time, we are labeled science deniers, not interested in the environment and guess what? We lose the entire election for the 30th year in a row!

        Carbon tax is the dumbest idea on the planet, but you can’t say that. We have to understand the true intent, the carbon tax has NOTHING to do saving the planet or science, but we don’t have the press for coverage. It’s true reason for being is to flip all nations under UN control and bring about “social justice and economic harmony” through the communist/socialist fantasy. When you know the true aim it’s really quick and easy to dismantle with science and display of heart.

        So…it it’s based upon science and the world is going to end….

        why don’t they let us import 50mpg cars that cost less than $8k. Win, win, win.
        why aren’t we pushing geo thermal…it works without subsidies (big hint there)
        why aren’t we using common sense heating cost reductions (another big hint)

        and why…if our scientist have talked about and mapped every square inch of our country with flood zones of 100 and 500 year capacities, why oh why aren’t the 4′ rising seas mapped out that are happening in 12 years? Please explain this.

        A true conservative is very pro environment, very pro not spending money needlessly on fuel (can spend on other things), no the true way to win the argument is for us to be the frugal, environmentally conscious Vermont conservative that we’ve always been.

        But we need to reframe the argument, we need to not fall for the trap where Lucy pulls the football away from Charlie Brown EVERY TIME.

        Don’t fight…..they automatically win. Just say yes we agree in conserving fuel usage, we agree on a sound environment. There will be a long pause after this. (They just LOST the argument). Then talk about DOING those things which benefit everyone.

        See no more discussion about Carbon Tax…..and their true intent will be exposed. Conservatives regain the mantle of displaying the benefits of being frugal and saving the environment. Now Prssc’s lose the next election.

        • Now Prssc = New World Order Progressive, rino, sjw, socialist, communist.

          They do have big tent, intent on ruining a perfectly good republic. Most people in both camps have no idea what they are doing.

          We don’t have thoughts, thoughts have us, and this is how people are kept in place…..these thoughts have them and they don’t know better. People don’t know they are being used, there is no reason for us to be mean or call them names, they just don’t know. They are only doing what they have been taught.

          • Hi Neil

            Just a point of view. Being an engineer, I don’t conform to any perception or thought, I’m a free thinker, developed since my self-employment days starting in 1972 after college. My BSME showed me how to think and involve to sustain my own livelihood. Had to fight the Gov systems: IRS, state & gov regulations, local taxes, Nixon’s Price Controls, employment and so much, much more and had to finance myself. I have two patents. A real fight to be an entrepreneur.

            I’m thoroughly discussed with people of lesser education and values that desire to control me and my finances. I owe them nothing, they owe me.

            The Chittenden County legislative power criminals need controlling via Sen Benning proposed bill limiting County Senators to three (I endorse 2 max)

            I’ve been thru the mill, business wise and as a property owner, fighting them constantly and have a lot of info.

        • If a new conservative person, a life long native is running as a D without anything being traced to conservative values? I could easily be placed on a ballot being a D. Others could also be a Flatlander with conservative values whom I’d welcome.

          Lets eliminate all aspects of the current Dome socialists. Get D conservatives in and slowly evolve the Dome. There has to be a subliminal involvement transformation

          I see it as a simplified little expense, following election laws and a betterment legislation. Return fight per their rules.

          PS. Don’t tell the Socialists. To me it’s so simple, straight forward. Get on the ballot and play the D game and lie and expound on their Town Hall rhetoric. Consume the floor. and agreed with the Socialists and take the issues to an elevated level. Wording can do it. Bring in the media.

          Play the game.

        • Being Innocent never wins. In politics it’s them or us it’s cut throat. To overturn a government and install control you have to placate to the voters (providing there’s no voter fraud as as happened in many states). Generally voters are stupid. I’ve seen many comments in various papers (mainly VT).

          I’m going to comment on this simple aspect often. Change R to a D and keep you conservative values when in Gov. stupidoes don’t know a true D or a C (conservation) that knows how to BS the debates.

          The best defense in any debate is a good offense. Simple reply questions can turn any debate in opposite forcing the opposite to respond. It’s simple college stuff.

          I believe if Keith Stern ran as a D his chances would be better, but rule as a R with his values.

          • Oh, we’re all about offense, of which we’ve seen none that’s been effective. People who are deceptive often find themselves hanging from a noose of their own making, it’s very enjoyable to watch, more so in a debate fashion. Innocent doesn’t mean spineless, no you have to have a back bone made of titanium to even get into the ring. If you don’t know the rules and games they play by, you’ll lose every time, which has been the case for those who rightfully have been playing by the guidelines set by our fore fathers in the defense of our liberties and constitution. Your points have much merit…..not discounted by any means. We need a plan a, b, c, d, e, f, g….and so on. So far we haven’t seen a cohesive plan a in the workings but we are hopeful. Sun Tzu has some good advice for us all to consider.

    • I would suggest that the voters are to blame, I would assume that they vote straight party line or just vote for who ever is already in office.

  5. Bear in mind, property taxes has transferred property ownership to the state. They own all the lands and everything on it. If you can’t pay your assessed “rent” by whatever tragedy, they will kick you off. There isn’t any property rights in spite of the Bill of Rights an Constitution.

    Be aware that if you owe lets say $500 taxes on a $200K property, they will take. The Supreme Court SCOTUS, just ruled that this is excessive confiscation, the same as a vehicle being confiscated if police suspect some strange substance. Towns and States make money this way. Look it up, I believe it was a case brought to the SCOTUS by a MI case. This should also apply to a town tax collector. They should be allowed only to confiscated the amount of land to cover the tax liability, not the whole property. This should control the tax-property grabbers if legally challenge. The Tax machine in VT think people are too dumb to challenge their operatives. Excessive taxes and method of confiscation can be considered a “fine” to extract the most money they can obtain.
    The article:
    Supremes issue major ruling on ‘excessive fines’
    Have to stand up for your rights.

  6. With our forests capable of holding 1,758 million metric ton of Co2 while we produce only about 8 million metric ton annually perhaps the forestry owners should be charging the state for the use of their forests!
    When the clearcut rules were passed I asked a former educator and school principal liberal where he thought the 25 species of animals and birds that typically move into the new habitat should move to to keep their species flourishing. He didn’t know and had not thought about that aspect of new growth. In trying to get him to think about the affects of the clearcut rules I asked him if he had money invested in stocks and bonds for his retirement? He replied excitedly “Oh yes.” Then I explained that my woodlots which I had owned for 30+ years, paid taxes on and were not in current use for Tax abatement, where I had spent countless hours pruning and thinning were intended to be my retirement with the intention of being able to clearcut having the highest quality timber possible thus the highest possible return. Now with clear cut rules I have to present a plan and ask for permission from the state to get my retirement. He didn’t think it was a big deal, until I suggested that we should pass rules that he should present a plan and as for permission to get his return on his stocks an bonds. He looked at me, “I never thought of a woodlot as someone’s retirement.” I replied that a true educator once told me, “for every action there’s a reaction, so stop and think before acting.”

  7. Sazaam!!!!!!!! The longer these clowns stay in session the more idiotic projects they dream up. What took them so long to figure out another tax scheme???????????? GO HOME!!!!!!!!!

  8. its kinda like when they wrote all those insurance stipulation laws in vermont and the senator that ran that law firm cleaned up sueing all the insurance companies for not following those elaborate insurance laws….. must be nice to right the rules and clean up..

  9. The flatlander leftards Have done their best to kill off Dairy farming so now their
    working on the forest “farming” . If the flatlanders so hate what VT was why in Hell
    did they move here to begin with.. Mights just as well turn VT into a burb of NYC…..
    The gov stupidity of both are equally on par.

  10. It makes one think they don’t want any trees harvested — and this is a way to achieve that without saying it.

    • You are right on……, it’s written out in United Nations plan….to be a wild area our state is. VNRC has reported that Vermont can only sustain 200k people. What does that mean for the rest of the world is VT is over populated by 3x. huh…..

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