Senator John Thune
With a new year upon us, small businesses and families will soon begin reviewing their finances in anticipation of filing their 2014 taxes. The federal tax code is a maze of complicated provisions made worse by the uncertainty businesses and individuals face as they wait for Congress to act each year on a host of tax measures. From the deduction for state and local sales taxes used by those who itemize, to the higher business deduction limits relied upon by small businesses, temporary tax relief does not provide the certainty individuals and businesses need to make long-term planning decisions. Instead, South Dakotans find themselves expending time and money complying with a tax code that would be better spent on new business investments or in their local community.
Earlier this month, Congress came very close to a bipartisan deal to make permanent a number of tax relief measures for individuals and businesses that have recently expired. This proposed deal was supported by Senate leadership of both parties as well as House Republicans, but unfortunately President Obama and a few of his liberal allies in Congress decided to scuttle the deal before it was finalized. Rather than work with Congress to make tax relief permanent for families and businesses, the president chose to issue a veto threat while good-faith negotiations were still under way, effectively killing the chances for a deal.
The administration’s actions are especially disappointing because the bipartisan deal included a provision to finally make permanent the deduction for state and local sales taxes that expired at the end of 2013. South Dakota is one of only seven states without an income tax, and South Dakota taxpayers deserve the same treatment as taxpayers in states with an income tax, where the deduction for state income taxes is a permanent part of our tax code. The proposed deal also would have made permanent the $500,000 small business expensing limit that expired at the end of 2013, which is critical for small business owners and family farmers as they plan future investments. Additionally, the deal would have made permanent measures that promote charitable giving, such as allowing individuals above the age of 70 and a half to give Individual Retirement Account savings to charities without incurring a tax hit.
The president’s ill-advised veto threat demonstrates how difficult it has been to work with this administration on common-sense tax relief measures to give individuals, including small business owners, the certainty they need to make investment decisions to help grow our economy. Unfortunately, rather than enacting permanent relief for individuals and small businesses, Congress did the bare minimum – a one-year extension of expired tax relief, once again kicking the can to the next year for Congress to take up yet again. South Dakota taxpayers deserve much better than this. They deserve permanent tax relief that they can rely upon and a tax code that treats them fairly.I intend to do whatever I can next Congress to make comprehensive tax reform a reality. I hope that next time the president will choose to work with us.