Senator John ThuneThe fact that paying some taxes is necessary does not make writing the check any easier for most of us. South Dakotans work hard for their money, and I believe that they should be able to keep as much of it as possible. The reality is, however, that the federal government has a hand in our pocket from the day we start working until the day we die, and for many South Dakotans and their heirs, even after they die.
The scope of the “Death Tax” has been limited since 2001, but it is set to be reinstated in 2011 at a rate of 55 percent for estates valued at over $1 million. This number seems high until you consider that the average value of farmland in South Dakota is $890 per acre, and the average farm in South Dakota consists of 1,396 acres. At today’s average land prices, the average farm has a land value of $1.24 million, not counting the machinery, livestock, and dwellings constructed on the property. Clearly, the death tax does not just hit the “billionaires” that its proponents claim it does.
Very few heirs to South Dakota farms, ranches, and small businesses would have the liquid assets necessary to pay the death tax or to pay lawyers to determine the legal maneuvers that millionaires use to circumvent the death tax. Furthermore, the idea that the IRS can grab over half of what a person has worked hard over a lifetime to achieve is not a good incentive for South Dakotans to work hard to leave assets for their families.
Earlier this month, the House of Representatives voted to make the death tax permanent at a rate of 45 percent. If this becomes law, or if the death tax is not permanently repealed, many South Dakota family farmers and small businesses owners will not be able to both pay the tax and leave their operations to their children.
I have long seen the death tax as an unfair way for the government to squeeze taxpayers until the very end and beyond. Equally distressing, the death tax prevents businesses and farms from being passed from one generation to the next. South Dakotans work too hard over the course of their lives building successful businesses and farming operations to not be able to pass those assets along to their heirs. Ending the death tax permanently will enable more South Dakotans to leave their families what they have earned.