People may disagree about what exactly Donald Trump is, but almost no one would call him a farmer. Well, no one except the property tax department of New Jersey. According to a recent report from the Wall Street Journal, Donald Trump has saved tens of thousands of dollars in property taxes on two golf courses in New Jersey through the use of a farmland tax break.
To qualify for the tax break, Trump maintains a small goat herd, hay farming and woodcutting operation on his New Jersey golf courses. The properties include just enough of these activities to qualify for a rather generous farmland tax break, which by one calculation has allowed Trump to pay less than $1,000 annually in property taxes on a property on which he would otherwise have owed around $80,000.
Trump is the latest of many high profile examples of wealthy individuals taking advantage of tax breaks meant for farmers. In 2011, reporting found that Tom Cruise managed to pay a measly $400 in property tax on an $18 million Colorado property by allowing sheep to occasionally graze on his land. Similarly, Senator Bill Nelson was able to reduce his property taxes from over $45,000 to just $3,700 by allowing cows to graze on his land in Florida.
What the cases of Trump, Nelson and Cruise reveal is that it is often difficult to craft tax breaks so that they can only be obtained by those individuals they are meant for. In the case of the farmland tax break, presumably the goal is to provide support to and help conserve small family farms, yet loose definitions of what constitutes an eligible farm allow it to be gamed by wealthy individuals.
To ensure that the Trumps of the world are not getting tax breaks for farmers, states can take a number of approaches. To start, states could tighten the rules around what constitutes an eligible farm, which is exactly what Colorado did after the revelations around Tom Cruise and other celebrities taking advantage of the system. Alternatively, states could trade-in their farmland tax breaks for an agricultural circuit breaker, which would only allow for a tax break in the case of real low- and middle-income farmers.
In any case, everyone should be able to agree that Trump is no farmer, even if he played a singing one at the Emmy’s.