Benjamin Franklin was on to something when he said the only certainties in life are death and taxes. He was right. Death and taxes are inevitable, and while a certain level of taxation is necessary for maintaining a strong military and to fund projects like building roads and bridges, I don’t think the government should take one dime more than what it needs to provide the basic functions Americans expect from it.
Defining “what the government needs” is up for debate, though, and it doesn’t take long to learn that it’s a pretty relative idea, particularly in Washington, D.C. I’ve always prided myself on being a small-government fiscal conservative who believes in individual rights and liberties. I think states and local communities are better positioned to make decisions, and I believe taxpayers know how to spend their hard-earned money more effectively than anyone in Washington.
Not everyone agrees with me, though, which is what brings me back to death and taxes. Americans are some of the smartest, hardest working people on earth. Some of them work a lifetime to create a nest egg, buy a home, maybe start a business, and hopefully have enough left over to pass on to their kids and grandkids. The federal estate tax, more commonly known as the death tax, runs contrary to the entire idea of the American Dream, which is why I’ve spent more than a decade fighting to bury it once and for all.
The death tax is actually a pretty easy concept to understand. When you die, the federal government assesses the value of what you have left behind, and if it thinks you have too much, it taxes your heirs. So if your farm is “too big” or your business is “too successful,” your children might have to pay extra taxes when you die.
Like I said, I’ve been fighting this fundamentally unfair tax for a long time, which is why I was glad the Tax Cuts and Jobs Act, the pro-growth tax reform bill I helped write, doubled the death tax exclusion level (the estate value at which the death tax kicks in). While this will undoubtedly help protect more families, especially those that have family-run operations like farms or ranches, I think we should eliminate the death tax once and for all, and I’ve again introduced a bill that would do just that.
Death tax supporters say it’s a way to collect more money from the wealthy, but it’s sometimes used to tax farmers, ranchers, and small business owners. Nearly all of South Dakota’s farms are family-run, and many of them are multi-generational. These operations are often land rich and cash poor, which means they have a lot of money tied up in land, infrastructure, machinery, and crops or livestock, but these investments aren’t necessarily reflected in the family checkbook.
The taxman doesn’t make a distinction, though, which is why operations that might look bigger on paper than they are in reality have the potential of being ruined by an untimely death. The last thing families should be worrying about after they’ve lost a loved one is whether or not they might lose a farm, ranch, or other business, too, which is why I won’t stop fighting until death is no longer a taxable event.