By Senator John ThuneAmerican history is full of colorful examples of public resentment of taxes. The Boston Tea Party is perhaps the most famous display of taxpayer outrage, and a revolt against whiskey taxes nearly tore our young nation apart during the presidency of George Washington. This is not a phenomenon unique to our country; even in biblical times, the tax collector was a reviled figure.
Taxes are, however, a necessary fact of life in civil society. All levels of government need revenue to provide essential services, which makes the writing of fair, responsible tax laws very important. I believe that well-considered federal tax policy is easily one of the most important duties of Congress.
I also believe that tax policy can be used as an agent of growth in our economy, particularly in these difficult times which affect us all. The tax code must protect the ability of businesses large and small to create jobs and to increase productivity. Government must encourage private economic expansion, not stand in its way.
In October, Congress passed legislation that extends important pro-growth tax provisions, such as the production tax credit for wind energy and other alternative energy incentives, which I have consistently supported. It also included several important provisions that are beneficial to South Dakota, such as the extension of state and local sales tax deductions, the qualified tuition deduction, and the teacher expense deduction.
Similarly, the bill reauthorizes the Secure Rural Schools and Community Self Determination Act, which provides important revenue to several school districts and counties in South Dakota. This program is particularly helpful to school districts in the Black Hills area where federal land ownership reduces the revenue that would otherwise be collected in property taxes.
Also of great importance is the fact that the bill protects taxpayers by correcting a flaw in the antiquated Alternative Minimum Tax. By correcting this mistake, Congress has saved 21 million middle class families from a substantial tax increase when they file their taxes next year.
While all of these measures are important, there is still more that needs to be done to promote pro-growth tax policies. It is time to once and for all repeal the Death Tax, which severely impacts South Dakota farmers who want to pass their land and assets from one generation to the next. Congress must also extend the lower marginal income tax rates and capital gains taxes, which are set to expire in 2010.
Some people view taxes as necessary, while some view taxes as evil. The truth probably lies somewhere in the middle. Personally, I don't like taxes; I think people should keep more of the money they earn. But as long as taxes exist, leaders at all levels of government should institute tax policies that encourage private sector growth and job creation, especially with the challenging economic conditions our nation is facing.