Senator John Thune
Every State of the Union address includes at least one or two “buzz” words. For the past six years under President Obama, one of the phrases that has stuck out to me in his annual address to Congress is the term “restore prosperity.” The president usually follows these words with his laundry list of ways he believes Congress should act, usually by growing the size of government, to “restore prosperity” for millions of Americans. What the president always seems to forget is that Uncle Sam can’t tax us into prosperity.
This year, the president called yet again for higher taxes on individuals and families, ranging from South Dakota middle class families saving for their kid’s college education, to small businesses and ag producers who are creating jobs and stimulating the economy. This top-down approach to “restoring prosperity” is precisely what the American people rejected in the last election, yet the president continues to promote the same stale, failed policies of big government.
The president is proposing $320 billion in new taxes on top of the more than $1.5 trillion in higher taxes already forced upon the American people during his administration. Under his plan, South Dakotans who have their assets invested in a farm operation or small business would get hit with a new capital gains tax when assets that have appreciated in value are passed on to the next generation. This is especially damaging to the family farm, the assets of which are often comprised largely of farmland that can appreciate considerably in value over time. And this new tax is in addition to the federal estate tax, better known as the death tax, which already imposes an unnecessary tax burden on family farms and businesses.
Without question, these tax proposals would make it more difficult for South Dakota families to pass land and other capital assets along to the next generation. We need to move in the opposite direction, by eliminating the death tax and making certain that family farms and business are not targeted with new, punitive tax increases.
South Dakota middle class families planning ahead for their kid’s college educations through tax preferred 529 college savings plans would also feel the pinch under the president’s plan. Right now the earnings in these accounts are tax-free, but the president would subject them to tax, meaning there would be fewer funds available for education expenses. We’re not talking about the ultra-wealthy; we are talking about middle class families trying to do right by their children by saving for an investment in their educations. If anything, we should make it easier for families to save for a college education, not make it more difficult.
These are not the ways in which we will restore prosperity for the American people. It’s time for Washington to stop putting forward proposals that would penalize job-creators and middle class families and instead work to make our outdated tax code simpler and fairer, ensuring we reduce Americans’ tax burdens while also making U.S. businesses more competitive in the global economy.I believe in tapping into the potential of the American people, not the government. I will continue to work with my colleagues in Congress to oppose ill-conceived tax hikes and to create a simplified tax system that works better for all Americans.