Monday, April 13, 2015

Taxes and GOP Lies on Taxes

They say that the only thing certain in this world is death and taxes.  As Thune and the SDGOP continue to talk about the estate tax, I think that we can add lies as they try to cross off taxes for themselves.  

Thune has been making rounds trying to claim that he is for the little guy when it come to protecting them from taxes; however, he fails to point out that the only people protected will be the BIG guys.  In the Rapid City Journal and several other places, Thune has been making a claim that small farmers are at risk of losing the family farm that has been in families for generations.  OHH, THAT MEAN GOVERNMENT!

He writes:
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.
Later on he uses the family farm line again-
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. 
Boy, that is scary.  Fortunately for more than 99.5% of us, this is no where near a threat.  The exemption from the tax is set at $5.3 million for an individual.  If married, that number is doubled to $10.6 million.  That sounds like a lot of South Dakotans here in South Dakota.  Wait, a minute... okay, I don't know anyone that has that kind of scratch, but I am a teacher.  So I asked Thune exactly how many farms are impacted by this terrible burden every year?  I will let you know when I hear something back.  In the mean time,

Fact shared some information in regards to Thune's statements:  Here are the highlights:
As a result, roughly 3,700 estates, about 0.12 percent of the total, had to pay any estate taxes last year. The estate tax is a tax on the transfer of an estate through a will or other means after a person dies.
and this
Thune is also citing an outdated statistic. The report referred to 2000, when the estate tax exemption was $675,000. It’s now $5.4 million. But even with the lower exemption, the CBO found that there were just 138 farms in the whole U.S. that might not have enough liquid assets to cover the amount they owed in estate taxes. The report also ran calculations with a few hypothetical figures, including if the exemption were $3.5 million. (In inflation-adjusted dollars, that comes to about $4.8 million in 2015, so it’s much closer to the actual estate tax exemption today.) Assuming that higher $3.5 million exemption, the report estimated there were 13 estates of farmers that would have insufficient liquid assets to pay the estate tax liability. The value of farmland has outpaced inflation since 2000, so presumably that number could be higher now. But we’re still talking about a very small number of farms. 
and this
According to a Congressional Research Service report in 2013, less than 1 percent of farm operator estates is projected to pay any estate tax. 
And that’s because there are exemptions for farmers and small businesses written into the estate tax code that allow most farmers — with a bit of estate planning — to avoid the estate tax altogether. For example, if the heirs agree to farm the land for another 10 years, they can get up to a $1 million exemption by valuing land at its farm use value rather than development value. An additional $500,000 exemption is possible if one agrees to a perpetual conservation easement restricting the use of the land. It is also possible to reduce the value of an estate by giving portions of the estate to heirs as a gift over a number of years. For a full description of exemptions available to farmers, see this Congressional Research Service report, starting on page 2. 
So it appears that Thune is not being truthful because the facts are not as scary as he claims.  Cutting it would add over $320 billion to our deficit in the next 10 years and only benefit .2% of the population.  Thune claims he wants a balanced budget with increased spending on military and decreased revenue from basically everywhere but lower and middle class.  This can't happen of course, so, he must rely on scaring people with less than half-truths to make sure they don't think about the reality.

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