Sen. John Thune
Benjamin Franklin once famously quipped that “in this world nothing can be said to be certain, except death and taxes.” While there’s some truth to what Franklin said, we certainly don’t need a system where Americans are taxed at death. The idea that death could be a taxable event might come as a surprise to some people, but believe it or not, the IRS sometimes and unfairly views death as a final chance to help fill its coffers. I strongly disagree, which is why I’m continuing my years-long fight to permanently repeal the estate tax – or the death tax, which is a far more accurate characterization.
The reality of the death tax hits families at the worst possible moment. The last thing families need to worry about when they’re grieving the loss of a loved one is how and when they’ll deal with the long arm of the IRS. The underlying premise of the death tax, which is re-taxing wealth that has already been taxed, is fundamentally unfair. It also hits every family differently. In South Dakota, for example, family-owned farms and ranches are often land rich and cash poor. On paper, a family with a several-thousand acre farm might seem far wealthier than what’s reflected in the family checkbook or savings account.
Anyone who has run a farm or ranch knows that land alone doesn’t pay the bills. The land represents an opportunity to earn a living, put food on the table, send kids to school, and keep the operation running from one day to the next. Without it, the farm doesn’t exist. The IRS takes the opposite approach. It only sees lines on a balance sheet. The IRS lumps land value with other assets, like cash in bank accounts and the owner’s home. In too many cases, the land and other assets can put the farm owner and his or her family directly in the crosshairs of death tax.
Some people argue that with smart lawyers and accountants and complicated estate planning, individuals can avoid having to pay the death tax at all. While that might be true for some of the wealthiest people who can afford both the ongoing time and financial burden of effective estate planning, that’s not the case for everyone. Estate planning comes at a cost, and every dollar spent on a lawyer or accountant is a dollar that isn’t reinvested into growing a business, hiring new employees, or boosting paychecks. That money isn’t used as effectively as possible while the individual is alive, long before the death tax may even apply.
Abolishing the death tax would give Americans greater peace of mind so they can focus on what really matters, and that’s why I’m committed to this fight. According to the American Farm Bureau, thousands of farms in South Dakota would exceed the death tax’s exemption level today, just based on the value of their land. My primary interest in taking up this cause has always been to protect those farmers and ranchers and to put this onerous tax six feet under once and for all.