Noem Helps Move Death Tax Repeal Forward in the House
Washington, D.C. – Rep. Kristi Noem today helped pass a repeal of the death tax out of the House Ways and Means Committee, enabling the legislation to be voted on by the full House later this year. Noem, whose family farm was hit by the death tax after her father passed away, has been a vocal supporter of its repeal.
“When my father died unexpectedly, our family was hit with the death tax,” said Noem. “We made the decision to take out a loan, so we didn’t have to sell our land and potentially lose the farm. The decision impacted nearly every financial choice we made for a decade. No family should have to go through something like that. I am committed to repealing this unjust – and frankly, immoral – tax that hurts small businesses and family farms most. Today marks a step forward toward a time where hard work is respected and death is no longer a taxable event.”
Rep. Noem joined Reps. Kevin Brady (R-TX), Sanford Bishop (D-GA) and Devin Nunes (R-CA) in introducing H.R.1105, the Death Tax Repeal Act of 2015, on February 26, 2015. The bill fully repeals the estate and generation-skipping transfer taxes – more commonly known as the “death tax.” With approval from the House Ways and Means Committee, of which Noem is a member, the legislation will next receive consideration by the full U.S. House of Representatives.
Thank you Kristi and Senators Thune and Rounds
Guess what Kristi… when my last parent is gone, I won’t have the luxury of paying taxes on an huge estate. I will be paying in to Uncle Sam because wages won’t be off limits like your billionaire friends’ estates.
Kristi said: “I am committed to repealing this unjust – and frankly, immoral – tax that hurts small businesses and family farms most”.
We all know that there is now a 5.3 million dollar exemption before estate taxes are paid. By definition, that is not a “small business” or small “family farm”.
I don’t like it when Democrats play games and it really ticks me off when we do. Estates larger than five million dollars should be taxed long before squeezing the lady at Morrells who is earning forty-thousand a year for her hard work.
Could we at least pretend to care about the average person. I won’t be thanking our Congresswoman or Senators for this effort. And they could, at the very least, get on this site and try to defend this blatant suck-up to the rich.
So is it okay for the government to tax money or assets that have already been taxed in life solely because the assets are passing to the next generation? The government is already stealing money from the next generation by racking up a huge debt.
It sounds like you just don’t think it’s fair that some people have a lot to pass on to their kids and some don’t. Life isn’t always going to be equal or fair.
You may think it is fair for the wealthiest to have overall tax rates way below that of the rest of us. I disagree.
Businesses grow. Farms become valuable. Stocks go up. That does not mean that their owners have paid significant taxes on their value. I am sure that you understand that. Right?
Jimmy James,
While I agree with your position, I don’t agree with your arguments. Sounds motivated in class envy and redistributive.
For me it is simple, I can pay the government when I’m alive or dead. I prefer dead.
And, while I agree that a death tax is appropriate, I do think the rules with regards to valuation for taxation has to be clear, fair and not arbitrary. Just a few decades ago (which I think is what motivates Noem’s emotion), it was arbitrary and punitive. BTW, the punitive manner was primarily related to the speed with which estates had to come up with money.
For instance, while I think 15% (or whatever the capital gains rate is) is fair, a $5mm estate tied up in farm land and farm equipment or a small business has trouble coming up with $750K in short order. Only those whose estates were primarily publicly traded stocks could pay the tax without taking drastic action. A small business or farm can’t just go sell half their inventory or their tractors to pay the tax.
My point: Your assertion that those opposed to the death tax are uncaring of others (those who don’t have big estates) is crap. In America, people who build big estates did something good when they are living. To just arbitrarily and punitively disrupt the fruits of their labor upon death isn’t “fair” either.
An idea I had one day a long time ago was: Fairly determine the value of the estate (easier said than done and I have ideas on that too), create a tax liability equal to 15% of the value, and then assess the heirs a certain percentage of the average of the last five years income generated from those assets until the tax liability is paid.
What this does is gets the tax paid over-time based on the assets ability to generate income and doesn’t disrupt the business or farm by forcing a sale of assets or taking on debt which might jeopardize the business (dying during the 2008-2009 recession when banks weren’t lending and having to borrow for death taxes could have forced the business into bankruptcy. Do we really want death taxes to be a cause of bankruptcy?).
P.S. I call it death taxes for a reason. I consider it a tax on the deceased and not the heirs, thus not a tax on inheritance. My reasoning is the deceased deferred taxes during life and is gets the final bill at death.
The heirs have done nothing to be taxed and what they get is what the deceased gives after paying the last bill.
Splitting hairs I know but I think it frames my position better. Verste? 🙂
There is some merit if there were taxes deferred during life, but if the assets were taxed during the life of the decedent, how is it fair to tax those assets again just because the owner died? Is that truly a taxable event?
Flat tax or fair tax-that’s my opinion.
I am not poor and anyone who knows me would know that the last thing I am is jealous. My impression of our elected officials is not unfounded. They are spending all this time reducing minimum wages and protecting large estates instead of focussing on the middle class. That is a problem.
And I simply don’t buy the argument that farms and businesses will be taken into bankruptcy after a five million dollar exemption. But if true, there are ways to address it besides eliminating a reasonable tax assessment.
We are going to get tax revenue from someone. Do the rich really need any more ways to get around paying it? For generations?
Please don’t confuse passion with envy.
The estate tax is just a way to penalize people for saving their money.
Seriously? When do you suppose that the rich will be paying taxes if they have not sold their property or stock and already reported capital gains? When do they pay social security taxes above .1% of income? If you remove the estate tax, when do they pay at all?
When do their children pay? When do their grandchildren pay?
Now. When do you and I pay? Hint: About 21 days from now.
Anonymous 9:54 and Anne Beal:
At the end of the day, the government needs something to pay its bills. What that amount is of course a matter of debate.
But, lets assume under the current system or flat tax, there is a certain amount that will be assessed to me based on my income (current and capital gains). I can pay all of it today or pay most today and some at death. I prefer the latter. That’s it.
Jimmy James,
You might not buy that it takes some into bankruptcy or has major dislocations to businesses and farms to come up with the cash. But, that doesn’t mean it doesn’t happen. I know it does and have directly observed it (not personally as I’ve yet to inherit a dime and don’t expect to). Businesses and farms might be worth a lot of money but few of them have 15% of their value sitting around in cash. It’s invested in land, buildings, equipment and inventory. Many of them have debt borrowed against that value. Because of the business I’m in (investment banking) and have relatives with farms, my educated guess is that there isn’t 1% (yes 1%) that could come up with 15% of their value in cash without major disruptions to the farm or business. Unless the assets are liquid (cash and publicly traded stocks), selling of assets is very seldom accomplished without major disruption and potentially detrimental to the viability of the business. Thus, they are dependent on having borrowing power with their lender.
Sure those that have low leverage might have no trouble coming up with the money but they still need the approval of a lender (heavily regulated so if the assets aren’t tangible for good collateral that could still be problematic). But, in reality, many businesses aren’t so de-leveraged. Now you got a problem and it can be significant. Get hit with a big tax bill suddenly there is no money for needed capital expenditures or even paying of bills or wages.
Again, I support the death tax and at a hefty rate. But, if it isn’t coupled with generous payment terms, I’m opposed to it at any rate. When I see advocates of a death tax dismissing these consequences, it concerns me. Its like saying “I think it fair so I don’t have to think about any adverse consequences” which by definition isn’t fair.
I agree that the government must be flexible whenever they are collecting that kind of money. I know that would not be easy for some to pay. On the other hand, someone earning half what you or I do still has to pay taxes every year. Even after the death of a loved one.
I know people struggling to get by and I also have seen 200 million dollar yachts. I know who I believe needs to pay the higher rate.
i have no idea why there has to be so much class-warfare screaming about this. a repeal will never be enacted as law because the tax is the foundational point where democrats will eventually leap up and drag down the super rich too. the upper middle class and merely somewhat rich will have to console themselves with that. mister jimmie james ‘republican’, i must tell you the upshot and most likely effect of all your screaming is to make sure that ultimately nothing changes. THAT good sir is all that the democrats desire now, since the current potus crammed a socialist collective/utopia down upon us and republicans are squirming under its weight. oh don’t change it. don’t change a thing. thanks.
i remain utterly convinced that the congressional republicans in both houses don’t see a real chance at all of getting this passed. but they’re going to work it as part of a larger proactive strategy on a host of other issues. obviously. mr jones makes the best points about any of this and at the end of it all i agree with him.
Oh sure. You agree with Mr. Jones. You probably like him just because he called one of my statements “crap”.
Well, maybe that sentence was crap but he could of come up with something a little more diplomatic.
It’s more than one statement Jimmy.
Troy explained his position on the issue well, it’s caused me to re-think my own view on the matter and consider his policy proposals quite reasonable.
Demagoguing “the rich,” simply because they’re “rich” is simply divisive and counter-productive to debate.
It is not my intention to be critical of the wealthy. I am critical of our representatives focussing their efforts on behalf of the rich at the expense of the common citizen. I do not want the Republican Party to become its most negative stereotype.