For any family, the death of a loved one is a difficult and grievous time. Now add the federal government to this painful period, and the situation becomes a nightmare.
The federal government shouldn’t force grieving families to pay a tax on their loved one’s life savings, built from income that has already been taxed by Uncle Sam. Many South Dakotans have witnessed this injustice firsthand — a friend, neighbor, or acquaintance who fell victim to the estate tax, also known as the death tax.
Death shouldn’t be a taxable event, which is why I’m glad the Senate recently adopted my amendment to the Senate budget resolution calling on Congress to finally eliminate this destructive tax. I also recently introduced the Death Tax Repeal Act of 2015, which would permanently eliminate the death tax, with 27 of my colleagues.
Here in South Dakota, we are land rich and cash poor, leaving roughly one-third of South Dakota farms vulnerable to the death tax, based on cropland values provided by the U.S. Department of Agriculture.
The death tax imposes a tax rate as high as 40 percent on family farms, ranches and small businesses, which hurts economic growth by discouraging savings and development. A recent study by the non-partisan Tax Foundation found that repeal of the death tax would increase the U.S. capital stock by 2.2 percent, boost economic growth, and create 139,000 jobs.
We work hard daily to build a better life for our children, but the death tax only burdens them. It violates the basic premise of the American dream.
Ninety-eight percent of farms in South Dakota are family owned and operated, and according to the South Dakota Department of Agriculture, over 2,500 South Dakota farms have been in the same family for more than 100 years. In some cases, families have to sell land just to pay the death tax, which punishes farmers and entrepreneurs for a lifetime of hard work.
By keeping more money in the hands of hard-working Americans, they will have a better opportunity to build a stronger economic future for their families and our country.
In the U.S. Senate, I will continue to promote common-sense policies, like repealing the death tax, that give South Dakota farmers, ranchers and small business owners the peace of mind of knowing that their hard-earned money will stay with their families, and not end up in the federal government’s coffers.