We live in a community where the Amish are buying a lot of land. They sell their land in Pennsylvania for $20,000 an acre and then move to our region of Wisconsin and buy land for $5000 an acre. So I’m living amongst the yuppie Amish.
That is from Penelope Trunk. What I find interesting is that I, as an outsider, cannot easily judge whether the Amish should be paying more for high-amenity land, or paying less for low-amenity land. (Near high-amenity land they can trade more with wealthier people.) You can make an argument either way that it should be obvious, except it's not. This is the socialist calculation debate all over again — it's only through a market process that we find out where the Amish should be living.
I know about the exclusions for income tax, but the Amish do collect sales and other businesse taxes. I wonder, are Amish “farms” owned as businesses/investments? Do the Amish pay capital gains taxes?
The Amish do not get income tax breaks. They are only excluded from FICA taxes. They do not believe in insurance on religious grounds, preferring mutual aid within the community. Thus they are exempt from social security (maybe medicare too) taxes, but they don’t receive it either. When they received the exemption, social security was a great deal for its recipients. The of course the personal investment value of it dropped like a stone. Recently, though, the relative investment value (annuity equivalent) of most people’s expected social security income stream has been shooting up like a rocket with the decline of long term interest rates.
In the last several years, many of the Amish farmers lost a lot of money in a ponzi scheme run out of Waterloo, Ontario having to do with pigeons.
http://www.bizop.ca/blog2/complaints-and-investigations/the-end-of-the-pigeon-king.html
It is obvious.
1. At $20,000 per acre, the only thing you can plant and make money on is houses.
2. Houses with no telephone or electricity are not competitive in the free market and I don’t think the Amish do a lot of contracting anyway, therefore they cannot capture the development premium built in to a $20,000 per acre land price.
3. The idea that an Amish farmer needs to be “near” Gentile customers in order to earn a premium on his apple butter is beyond absurd. We have an interstate highway system.
Accordingly, moving to a more rural area where land prices do not have a development premium makes perfect sense for Amish.
@Jeremy The Amish do theoretically collect sales taxes on their goods, but much of their sales run in gray markets where sales taxes are wholly ignored. This drives local businessmen crazy, since the Amish naturally out-compete. It may be different in states other than PA, but that’s at least how it is in the areas outside Lancaster
I don’t think the Amish do a lot of contracting anyway
Actually, the Amish have gotten into building trades in various places. They’re quite willing to use power tools owned and provided by the employer on the job. In Indiana, many went to work in manufactured housing and RV factories (and were hit hard by the housing bust) and even applied for unemployment benefits:
http://indianapublicmedia.org/momentofindianahistory/living-simply-good/
The economic calculus driving Amish (and other “plain people”) to low-cost agricultural lands is primarily due to large family size. They can afford farms for their chilren that would be out of reach closer to urban areas.
Moving to less-developed areas also makes it easier for them to buy farms within close proximity, important if you don’t use cars for transportation, and very important given the high value they place on community.
Unlike most commentors on MR, I grew up in and once belonged to one of the “plain” sects. We were a bit more liberal, having cars and electricity, but I have relatives who live without both.
“the Amish are buying a lot of land”
Just one lot? An anecdote merits an article?
Don’t you love the English language?
Amish population doubles every 18 years, this outward migration from densely-developed agricultural areas to lower cost, lower density areas has been going on for decades. The need for additional farms for offspring drives it, even as a greater percentage of the Amish population finds employment in trades and small business rather than farming.
If sufficient fertile land were available, most Amish would prefer to stay in farming, but especially in the dairy farming regions the farms are less economically viable year by year.
There is a lot of good land in this country. A lot of that good land is not being used as farmland anymore. In my own neighborhood, a lot of land that is designated “Prime agricultural land” (i.e.river flat) by the state is going back to nature or being turned into housing developments and horse pastures. Lately the Amish have started buying up some of this land and turning it back to productive farmland.
We will see how long this trend lasts. It would amaze me if they can make a living farming in this area given the tax environment. But if anyone can, they can.
land does not have monetary value to the amish…the land is the value…so they exchange less for more through the vehicle of your worthless money..
Yes. That’s how money works for everyone.
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