How Congress can clean up the tax code to support rural America
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Last week, President Trump released his outline for a tax code overhaul, aiming to make it simpler for both American businesses and individuals. Streamlining and reducing complicated tax provisions is the right thing to do, but as Congress turns to fill in the details, they can’t forget how tax policy uniquely impacts rural forest owners whose actions and assets provide great benefit to all Americans.

Approximately 22 million American families and individuals collectively own more than 282 million acres of forestland across rural America. This is more than one-third of the nation’s forests and more land than that owned by corporations or the federal government. With an average holding of about 40 acres, their forests provide vast benefits to all Americans: clean air, clean water, and habitat for our nation’s wildlife.


On top of this, family-owned forests provide more than 50 percent of the wood that goes into supply chains here in the U.S. to create products we use every day, and support more than 2.4 million jobs across rural America.


Owning and caring for this forestland requires taking on an incredible amount of risk. While farmers incur risk annually with each planting, they can start fresh each year. By contrast, forest owners take on risk for 20 years, 40 years, and sometimes 80 years before they yield a product.

To see this product through to the end, family forest owners must care for their trees annually — managing for insects and disease, maintaining roads or installing wildfire breaks — all out of their own pocket. And in return, each year, these forests provide billions in public benefit at very little cost to the taxpayer.

The current federal tax structure recognizes forest owners’ risk and their contribution to the common good, and supports them in the stewardship of their land. It is vital to the continued productivity of our forests and to rural America, that as Congress cleans up the tax code, they seek to encourage keeping land in forests and keeping them productive. They can do this in several ways.

First, Congress can treat timber income as a long-term investment subject to capital gains tax rates. The majority of family landowners only harvest timber once in their lifetime, yet will incur expenses annually in order to maintain their woods. With such risk over a length of time, timber income should be categorized as the long-term investment it is.

Next, just like other rural businesses, forest owners have annual expenses that are essential for maintaining their land. Congress can continue to allow forest owners to deduct or expense forest management and reforestation expenses. Examples include installing a fire break to reduce wildfire risks, creating culverts in forest roads to protect streams, and replanting trees after harvest.

Finally, Congress can eliminate the estate tax and ensure that families can pass their land to the next generation without negative consequences on forests, Many families cannot afford the tax, forcing them to prematurely or unsustainably harvest timber, or even sell parcels of forest land to developers for housing or other forms of development.

If Congress is serious about supporting rural America and those that provide invaluable environmental benefits and economic growth to our nation, then it’s vital they are supported in the tax code overhaul. By including the right provisions in this year’s tax reform legislation, Congress can go a long way toward supporting more than one-third of our rural land base and the 22 million people that own and care for it.

Tom Martin is president and CEO of the American Forest Foundation.

The views expressed by contributors are their own and are not the views of The Hill.