Thune, Daines, McConnell, Crapo Lead Entire Senate Republican Caucus in Urging Biden Administration to Drop Step-Up In Basis Tax-Hike Proposal  

WASHINGTON — U.S. Sens. John Thune (R-S.D.), Steve Daines (R-Mont.), and Mike Crapo (R-Idaho), members of the tax-writing Senate Finance Committee, and Mitch McConnell (R-Ky.) today led the entire Senate Republican caucus in urging President Biden to abandon his effort to impose a capital gains tax increase on family-owned businesses, farms, and ranches. Repealing this part of the tax code would have a devastating effect on multi-generation operations, which could lead to job losses, liquidation, or outright closure.

“These [proposed] changes are a significant tax increase that would hit family-owned businesses, farms, and ranches hard, particularly in rural communities,” the senators wrote. “These businesses consist largely of illiquid assets that will in many cases need to be sold or leveraged in order to pay the new tax burden. Making these changes could force business operators to sell property, lay off employees, or close their doors just to cover these new tax obligations. The complexity and administrative difficulty of tracking basis over multiple generations and of valuing assets that are not up for sale will lead to colossal implementation problems and could also lead to huge tax bills that do not accurately reflect any gains that might have accumulated over time. As you will recall, a proposal to reach a similar outcome by requiring an heir to ‘carry-over’ the decedent’s tax basis was tried before in 1976—and failed so spectacularly it never came into effect. It was postponed in 1978 and repealed in 1980.”

“Passing on the family farm to the next generation is a top priority for many farmers and ranchers,” said Zippy Duvall, president of the American Farm Bureau Federation. “Eliminating stepped-up basis and increasing capital gains taxes will make it much more difficult, or even impossible, for parents to pass on their farm or ranch to their children. This is a critical tool for America’s farmers and ranchers, and we urge all members of Congress to oppose efforts to eliminate it.”

“At a time when small businesses are working to recover from the COVID-19 pandemic, repealing stepped-up basis would be a devastating setback for family-owned businesses,” said Courtney Titus Brooks, senior manager of federal government relations at National Federation of Independent Business (NFIB). “The current proposal to eliminate stepped-up basis would cause significant job losses and would leave heavy tax burdens on future generations. Small businesses thank Senators Thune, Daines, and Crapo for advocating on behalf of family-owned businesses and urge Congress to keep this important policy in place.”

“We appreciate the efforts of Senators Thune, Daines, and Crapo to inform President Biden on the catastrophic impacts that the repeal of stepped-up basis would have on all family-owned businesses and are grateful to see so many in Congress are fighting to preserve the common-sense tax provisions so critical for U.S. cattle producers,” said Danielle Beck, senior executive director of government affairs of the National Cattlemen’s Beef Association. “The Biden Administration has made clear that bolstering the American economy is a top priority and recognized agricultural supply chain resiliency as a core component of that effort. Family-owned agricultural operations are the economic drivers of rural communities across the United States; therefore, it is imperative that this Administration understand that resiliency can only be achieved and maintained when new generations – whether their family has had a long history in agriculture, or they are breaking into the industry – can build upon the contributions of today’s farmers and ranchers.”

“Stepped-up basis has helped family-owned businesses and farms stay in the family for generations,” said the Family Business Estate Tax Coalition (FBETC) Steering Committee. “President Biden’s proposal to repeal this longstanding tax provision would saddle future generations with unsustainable tax burdens and make it that much harder to continue operating family-owned businesses and farms across the country. In addition to subjecting family-owned businesses and farms to a significant tax increase, repealing stepped-up basis also would lead to an estimated 800,000 job losses over the next decade. The FBETC appreciates Senators Thune, Daines, and Crapo for standing up for family-owned businesses and farms and we are hopeful that Congress will protect U.S. workers by preserving stepped-up basis.”

“If step-up in basis is eliminated it will be an economic disaster for family businesses, their employees, the local communities, and the national economy,” said Pat Soldano, president and CEO of the Policy and Taxation Group. “Family businesses create 59% of the workforce, 83.3 million jobs, and 54% of the GDP, $7.7 trillion. Elimination of step up and an increase in capital gains could result in an 81% tax on the business owner when he dies.”

Additional groups that support the senators’ effort include the Associated General Contractors of America, National Association of Manufacturers, and the U.S. Chamber of Commerce.

Joining Thune, Daines, McConnell, and Crapo in signing the letter were U.S. Sens. John Boozman (R-Ark), Chuck Grassley (R-Iowa), John Cornyn (R-Texas), Richard Burr (R-N.C.), Rob Portman (R-Ohio.), Pat Toomey (R-Pa.), Tim Scott (R-S.C.), Bill Cassidy (R-La.), James Lankford (R-Okla.), Todd Young (R-Ind.), Ben Sasse (R-Neb.), John Barrasso (R-Wyo.), John Hoeven (R-N.D.), Joni Ernst (R-Iowa), Cindy Hyde-Smith (R-Miss.), Roger Marshall (R-Kan.), Tommy Tuberville (R-Ala.), Deb Fischer (R-Neb.), Mike Braun (R-Ind.), Marsha Blackburn (R-Tenn.), Roy Blunt (R-Mo.), Susan Collins (R-Maine), Tom Cotton (R-Ark.), Kevin Cramer (R-N.D.), Ted Cruz (R-Texas), Lindsey Graham (R-S.C.), Bill Hagerty (R-Tenn.), Josh Hawley (R-Mo.), Jim Inhofe (R-Okla.), Ron Johnson (R-Wis.), John Kennedy (R-La.), Mike Lee (R-Utah), Cynthia Lummis (R-Wyo.), Shelley Moore Capito (R-W.Va.), Jerry Moran (R-Kan.), Lisa Murkowski (R-Alaska), Rand Paul (R-Ky.), James Risch (R-Idaho), Mitt Romney (R-Utah), Mike Rounds (R-S.D.), Marco Rubio (R-Fla.), Rick Scott (R-Fla.), Richard Shelby (R-Ala.), Dan Sullivan (R-Alaska), Thom Tillis (R-N.C.), and Roger Wicker (R-Miss.).

Full text of the letter below:

The Honorable Joseph Biden
President of the United States
1600 Pennsylvania Avenue NW
Washington, D.C. 20510

Dear President Biden,

We appreciate your efforts to address America’s infrastructure challenges, but the cost of these investments should not be borne by family-owned businesses, farms, and ranches across the country. We are concerned that your American Families Plan proposes to make drastic changes to the taxation of capital income, including a longstanding tax provision that prevents family-owned businesses, farms, and ranches from being hit with a crippling tax bill when a family member passes away.

Under current law, passing down a family business to the next generation does not impose a capital gains tax burden on the business or its new owners. Rather, the decedent’s tax basis in the business is “stepped-up” to fair market value, preventing a large capital gains tax bill on the growth in the business’s value. If the functional benefit of the step-up in basis were eliminated and transfers subject to the estate tax also become subject to income tax, as you have proposed, many businesses would be forced to pay tax on appreciated gains, including simple inflation, from prior generations of family owners—despite not receiving a penny of actual gain. These taxes would be added to any existing estate tax liability, creating a new backdoor death tax on Americans.

These changes are a significant tax increase that would hit family-owned businesses, farms, and ranches hard, particularly in rural communities. These businesses consist largely of illiquid assets that will in many cases need to be sold or leveraged in order to pay the new tax burden. Making these changes could force business operators to sell property, lay off employees, or close their doors just to cover these new tax obligations. The complexity and administrative difficulty of tracking basis over multiple generations and of valuing assets that are not up for sale will lead to colossal implementation problems and could also lead to huge tax bills that do not accurately reflect any gains that might have accumulated over time. As you will recall, a proposal to reach a similar outcome by requiring an heir to “carry-over” the decedent’s tax basis was tried before in 1976—and failed so spectacularly it never came into effect. It was postponed in 1978 and repealed in 1980.

Further, the proposed “protections” simply delay the tax liability—rather than provide any real tax relief—for those continuing to operate the business, farm, or ranch. In fact, these protections create new “lock-in” effects that could make any eventual changeover in operation or transfer of the business financially untenable. Imposing a tax increase on hardworking Americans would harm the economic recovery from COVID-19 and endanger American jobs. A recent study by E&Y found that eliminating the benefit of a step-up in basis would cost the U.S. economy 80,000 jobs each year over the next decade—and an additional 100,000 jobs per year in the long run. Additionally, for every $100 in revenue raised by this tax increase, $32 would come directly from the pockets of American workers. A study by the Texas A&M Agricultural and Food Policy Center reached equally unsettling conclusions, determining that 98 percent of the representative farms in its 30-state database would be impacted by a proposal to eliminate the benefit of the step-up in basis, with average additional tax liabilities totaling $726,104 per farm.

We respectfully urge you to reconsider your proposal to repeal this important part of the tax code. Preserving step-up in basis would save American jobs and ensure that small businesses, farms, and ranches across the country can stay in their families for generations to come.

Sincerely,

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Are we ready to hit the reset button?
By State Rep. Trish Ladner

Are we ready to hit the reset button?

This past week, I attended the Midwest Legislative Conference hosted in Rapid City. The conference was attended by over 600 legislators from 11 Midwest states and 4 Canadian Provinces (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, Saskatchewan, South Dakota, Wisconsin, Alberta, Manitoba & Ontario). It was an amazing opportunity to hear from industry professionals, meet with other legislators to discuss policy, problems, and potential solutions. There were many breakout sessions led by experts in their field covering a wide variety of topics from the changing fiscal landscape, to the post pandemic challenges going forward.

Most workshops addressed issues that we, as a society, are now forced to address. This includes our state’s fiscal policies, and on a more global scale, our relationships with people and governments across continents. It has made us face the reality that life is fragile. Political and economic systems including supply chains and “on-shore” production of all essentials can, and were disrupted.

The conference’s opening keynote speaker was Journalist, Ben Hammersley. My takeaway from his talk can be summed up in an example he cited about Kodak. At one point this iconic company had the chance to embrace the digital camera, but refused. By not resetting their vision and direction for Kodak, they ultimately failed. His question to all of us was profound, “We are post pandemic and are we willing to hit the reset button?”

Elaine Dezenski and John Austin presented a breakout session on “Ally-Shoring” A Path to Rework Supply Chains and Rebuild Economies.” In a nutshell, Ally-Shoring addresses broken supply chains that became apparent and provides an option for countries to disengage from existing supply chain agreements with China and other states that seek to undermine American interests and forge strong working relationships with Western-led trade countries like the USA, Canada, Mexico and South America. Austin noted that, “By strengthening long-standing relationships with Western Europe, the Middle East, Africa and Asia we could restart and lean into our relationships with those we trust.”

A local presenter, Deni Amundson, Program Manager from Build Dakota Scholarship Program presented information about an innovative model that fosters greater collaboration among education and workforce programs with a goal of helping residents become prepared to take advantage of promising careers in emerging and high-demand economic sectors across South Dakota. With this program, you can earn a full-ride scholarship at one of four South Dakota technical colleges. Recipients of the scholarships commit to working in South Dakota, in their field of study, for three years following graduation. For more information visit BuildDakotaScholarships.com

It appears that Ms. Amundson and Ms. Dezenski are on the same page. Ally-Shoring would bring good jobs, to the industrial Midwest with new opportunities and the South Dakota Scholarship program educates and creates the workforce needed to fill those jobs.

But, what can I do? I’m just one person. The simple truth is that each and every one of us can help to facilitate change. We can help “reset” our economies by standing up and making the decision to begin supporting our local growers and ranchers. By buying goods from those we trust, each of us can make a concerted effort to strengthen the United States and the free enterprise system in America.

As Abraham Lincoln said, “We have the right to rise!” Our goal as American’s should be to see our local Mom & Pop shops reopen and not just survive, but to thrive once again. We the people, united together, can help facilitate an economic recovery within our communities, and across the American Heartland!

Representative Trish Ladner, District 30

Governor Noem Announces Results of Nest Predator Bounty Program

 

PIERRE, S.D. – Governor Kristi Noem and the South Dakota Department of Game, Fish & Parks (GFP) have announced the results of the 2021 Nest Predator Bounty Program. 53,642 total nest predator tails were turned in by 2,773 participants. The Nest Predator Bounty Program reduces local nest predator populations as a way to enhance pheasant and duck nest success.

 

“South Dakota is one of the only states that hunts our state bird. The nest predator bounty program began in 2019 as a key component of my Second Century Initiative,” said Governor Kristi Noem. “It’s a great way to encourage youth and families to get outside and ensure trapping remains a part of South Dakota’s long-standing outdoor heritage. And it’s leading to higher nest success, which means more beautiful ringnecks for our hunters.”

 

2021 marked the third year of the program. A total of 81,000 tails were turned in between 2019 and 2020. The strong 2020 pheasant season proved the success of the program, so the bounty was doubled this year to $10 per-tail.

 

In 2021, 29% of the program participants were under the age of 18, up from 16% in 2020. These 812 South Dakota youth handed in 12,108 tails. 91% of all tails were turned in East River. Each week, a drawing was held for youth participating in the program. Winners of the drawing received three live traps, a trapping booklet, and a knife. Photos of drawing winners can be found here.

 

For more information on the Nest Predator Bounty Program, visit gfp.sd.gov.

 

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4 months after the Attorney General’s ballot explanation was submitted, it looks like Nick Reid, the sponsor of the jungle primary ballot measure has finally moved forward with circulating petitions.

With roughly 110 or so days left.. will they be successful? We’ll see.

South Dakota Closes 2021 Budget Year with a $85.9 Million Surplus

State’s Total Reserves Increase to $301.8 Million

 

PIERRE, S.D. – Today, Governor Kristi Noem announced that South Dakota closed the 2021 budget year on June 30 with a surplus of $85.9 million. Total general fund revenue for fiscal year 2021 finished $62.0 million higher than adopted estimates, and the state general fund budget ended with expenditures approximately $23.9 million lower than budgeted.

 

“Because of our respect for freedom and our continued emphasis on fiscal responsibility, South Dakota’s financial house is in order and positioned to ensure a safer, stronger, and healthier South Dakota for the next generation” said Governor Noem. “Our economy continues to be the strongest in America. Our low unemployment rate, strong labor force recovery, and terrific tourism numbers are generating historic revenues for the state.”

 

 South Dakota’s year over year growth in fiscal year 2021 was $274.2 million or 15.7%, compared to a ten year average of 4.6%. This historic growth is the largest that the state has seen in over 30 years; quite possibly in state history. Sales and use tax, which is the state’s largest revenue source, finished $26.6 million above estimates and grew 14% over the prior fiscal year, compared to a ten year average of 5%. The full fiscal year 2021 revenue metrics can be found at bfm.sd.gov.

 

“We will continue to be responsible stewards of the taxpayers’ money with an eye towards future economic difficulty,” continued Governor Noem “With Washington driving high inflation and the Federal Reserve planning to raise interest rates, our rainy day fund is in strong shape to weather whatever challenges may arise.”

 

By law, the fiscal year 2021 surplus of $85.9 million was transferred to the state’s budget reserves. The state’s reserves now total $301.8 million, or 16.6% of the fiscal year 2022 general fund budget. The state has held a AAA credit rating with all three major credit agencies since 2016.

 

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Noem Waives Hours of Service Regulations to Deal with Fuel Shortage

PIERRE, S.D. – Governor Kristi Noem has signed Executive Order 2021-10 granting extended hours of service for the commercial delivery of petroleum products in South Dakota.

The order declares a state of emergency and exempts delivery of gasoline, diesel, jet fuel, and ethyl alcohol from federal motor carrier regulations on drivers’ hours of service. Residents and businesses in western South Dakota are faced with an unexpected shortage of supply.

“We are at the height of our tourism season, as well as a busy time for our agriculture industry. Maintaining the supply of fuel is crucial to preventing a disruption of service to two of our state’s major industries,” said Noem. “This 30-day order is meant to ensure a steady supply of fuel is available to our visitors, businesses, farmers, and ranchers in the western part of the state.’’

The governor noted that this is not just an issue within South Dakota, but a regional emergency that is being met with swift action.

Although hours of service have been temporarily suspended for commercial deliveries, companies may not require or allow fatigued drivers to make deliveries.

The executive order was signed July 17 and expires at midnight on August 16, 2021. All other road safety and vehicle compliance regulations still apply.

The executive order can be downloaded here.

Just got this great item from eBay this morning for my collection. Or at least for trading.

From the 1906 State Republican Convention in Jamestown, North Dakota.

I wish it was a South Dakota pin because the color is beautiful on it – this picture does not do it justice.

(Will anyone notice if I scratch out the ND?)

 

Demonizing and Defunding Police Has Consequences
By Sen. John Thune

American communities are less safe today than they were a year ago. Crime rates have surged since “defund the police” became a rallying cry. It’s no coincidence that cities that have slashed their police budgets have seen huge increases in violence. As of the end of May, Portland, Oregon, was on track to exceed 1,000 shootings for this year. In the first 14 weeks of 2021, New York City shootings were up 81 percent. In Oakland, California, carjackings are up almost 88 percent. Unfortunately, these are just a few examples.

The crime surge is real, and it is frightening. Statistics and percentages can seem abstract, but there are people behind every one of those crimes. People whose lives have been cut short or ravaged by violence. People whose sense of safety has been destroyed.

This won’t be a surprise to most South Dakotans, who overwhelmingly support our law enforcement officers, but defunding the police is a terrible idea. Some of the cities who cut their own police funding are even recognizing the mistake they’ve made and seeking to restore funding they cut. Unfortunately, the problem won’t necessarily be fixed that easily. Because the “defund the police” movement has not just resulted in smaller police budgets, it has also resulted in lower police morale, leading to a wave of police retirements and resignations.

Now, police departments are worried about having enough officers to keep their communities safe. It turns out that when you spend months vilifying police officers and demonizing them for doing their jobs, some of them no longer want to stay. To me, this is perhaps the worst consequence of the defund the police movement. Resources and equipment can be built back up again, but it’s a lot harder to replace good, seasoned officers – particularly right now, when it’s difficult to imagine why anyone would want to become a police officer. Why would men and women sign up for a job where they are regularly characterized as the worst kind of criminals? The sickening scene of protesters shouting “death to police” outside a hospital where two ambushed law enforcement officers were fighting for their lives has to be emblazoned on the minds of police officers nationwide.

The defund the police movement unjustly paints the entire law enforcement community as corrupt and immoral. We all know that simply isn’t true. Police officers are heroes in their communities – brave and committed Americans who put on the badge each day knowing the risk to their own safety. These are the people we call when we have a car accident, see someone in trouble or in need, or fear for our safety. These are the people who run toward danger and violence when the natural reaction is to run away from it. Our law enforcement officers deserve the highest level of respect.

Now, are there bad police officers out there? Of course there are. There are bad teachers out there too. And bad social workers. And bad businessmen. But just as it would be outrageous to demonize all teachers because of the few bad apples in their profession, it is outrageous to demonize the hundreds of thousands of dedicated Americans defending public safety because of a handful of bad officers.

We owe our men and women in law enforcement a great debt – a debt we can’t even fully comprehend. These men and women go out and risk their lives every day of the week, every month of the year, to keep us safe. And they bear a heavy physical and emotional burden. It’s tough to have to see evil on a daily basis – to spend years rescuing children who are in trouble or supporting victims of violence or bringing rapists to justice. They confront violence so that we don’t have to – and they pay a price. We owe them and their families our profound gratitude.

Democrats bear a substantial amount of responsibility for this situation. Far too many of them actively supported the “defund the police” movement and encouraged resentment toward law enforcement. It is disgraceful that anti-police rhetoric has become such an accepted part of our national conversation – and has been winked at or endorsed by so many Democrat leaders. We owe our police officers much better.

If any good can come out of all this violence and heartbreak, I hope it’s an increased recognition of how essential police officers are to keeping our communities safe and a rejection of any idea of defunding the police. It’s time to focus on protecting public safety and honoring the men and women who spend every day working to promote it.

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Learning from Our Mistakes
By: Governor Kristi Noem
July 16, 2021

One of the main reasons why we study history is to learn from both our triumphs and our mistakes. Sometimes those mistakes are painful to admit, but we study them nonetheless so that we can ensure that they are never repeated. That’s why students learn about the Holocaust. That’s why we study the atrocity of American slavery and the Civil War that great leaders like President Lincoln fought to end it. It’s also important that our state and our nation know about the tragic story of early Indian boarding schools.

Indian boarding schools were created in 1860 in a purported effort to assimilate Indian children into American culture. From 1860, when the Bureau of Indian Affairs (BIA) established its first Indian boarding school, throughout a majority of the 1900’s, many Indian children were forcibly removed from their homes and families and placed into these BIA schools. They were prohibited from (or punished for) speaking their language or practicing their traditions. Countless Indian children never came home, overcome by sickness and harsh conditions, and many of those who survived the boarding school experience struggled to share their traumatic memories.

The history of Indian boarding schools is not well known outside of Indian Country. However, the Tribes sharing borders with South Dakota suffered losses of their children. The accounting of children who died at these schools is inadequate at best. Mass burials, unmarked graves, and poorly kept death records haunt family histories.

In meetings with the tribes, I heard stories of heartbreak, appreciated the need for closure on this part of their history, and respected how important it was to have these children appropriately identified and returned to their homelands. I worked with the Army to help facilitate this long process of repatriating these children.

Our Tribes in South Dakota have been working diligently to retrace the steps of their lost children and will be repatriating their remains to lay them to rest in their homelands.  This week, the first children will be brought home to South Dakota and to Rosebud. As I continue to be made aware of Dakota and Lakota children being repatriated, I’m happy to see those early efforts have yielded results.

It is with great sincerity that my family and I offer our thoughts and prayers to the families and to the Tribes in South Dakota as they conduct their ceremonies for those coming home, and we are with them until all their children are returned.

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