Under Governor Mark Warner, Virginia created the opportunity for land owners to place conservation easements on their land in return for receiving Tax Credits. Tax Credits are a vehicle that benefits wealthy individuals who can buy Tax Credits at a discount and then use the Credits to pay the taxes that they owe. The net effect is that the wealthy get to pay their taxes for about $0.75 or $0.80 on the dollar.
Like many government programs that sound great to politicians, the details are called “unintended consequences”. Conservation Easement Tax Credits are certainly in that category. It is also obvious Governor Warner was not thinking of the “average Virginian” when he championed this idea that so benefits the wealthy.
An industry has been created to create and transfer Conservation Easement Tax Credits. When the legislature is in session, that industry always publishes a variety of articles talking about the many positives of the Tax Credit program. Never have I seen a rational discussion about Conservation Easement Tax Credits that also covered the enormous downside of this seriously flawed program.
As a true believer in free market capitalism being the best way to allocate resources, over the next six weeks I would like to provide you a very brief summary of some of the most serious negatives associated with Conservation Easement Tax Credits. Stay tuned!