Gary Deering – October 6, 2017
I think we all hope for a relatively similar progression to our lives. We hope that the tough decisions and hard work pay off, and that after making the usual payments on assets, housing, vehicles, insurance, and education for our children, we hopefully will have enough time to save and pay for us to die!
The death tax has been in the news a lot lately and has been accused of being a tax that only the rich have to worry about. The problem with giving this tax the title of the “Robin Hood” of taxes is it forgets to take into account the backbone of America, the ones that raise the food. I am very concerned, today after reading the comments of South Dakota Senator Mike Rounds announcing his opposition to the Republican Party’s long time goal of repealing the death tax.
Ironically, his statements are much different than they were just a few months ago, as reported by the Huron Plainsmen, when he commented on repealing the death tax, “That would be a positive move forward for them (farmers and ranchers). Often because their assets aren’t liquid, they are forced to borrow money, or sell land to pay the federal estate tax,” he said.
I’m not sure what caused Senator Rounds to do a complete turnaround in the last couple of months but I feel the family farmers and ranchers of South Dakota deserve an explanation. It’s hard to believe a Senator from South Dakota would be quoted as saying the death tax repeal is unnecessary when it will at some point affect one-third of the farmers and ranchers in the state that he represents.
Farmers and ranchers are asset rich, and cash poor making it very difficult to hire people to help find loopholes that many are accusing the beneficiaries of the death tax of doing. Many times estates rise to the level of being taxed before producers and estates have time to adjust, as many farms in South Dakota experienced when land values rose over 20 percent from 2013-2014. There are various ways of helping your estate get around the burden of the death tax, but unfortunately planning, paying, caring for and being taxed on assets which you have saved for takes up as much time as worrying about passing your legacy on.
The death tax puts family farming operations at a disadvantage to the major corporate counterparts, therefore it seems hypocritical to me that anyone can be pro family farming and for the death tax.
This is an issue I have been watching closely as I come to an age of taking over the assets and management of my family’s ranch. I’m working together with my parents, for the better part of two years, on estate planning for our ranch. But, I also recently turned 40 and as I look to my children I realize that in the not too distant future we will be planning my estate.
Farmers and ranchers will agree with the Senator that there are a number of items within the tax reform bill that we need to focus on, like interest deductions, 1031 exchanges, and more, but we do not feel that death tax should be used in playing Russian roulette!
We have been grateful for the continued support from Senator John Thune and Congresswoman Kristi Noem on repealing the estate tax for our farms and ranches. I hope Senator Rounds can take the time and visit with Congresswomen Noem, and get her to explain why the death tax matter to South Dakota, as she has dealt first hand with how devastating this tax can be after a farm accident took her father.