Political Wrinkles  

Go Back   Political Wrinkles > Political Forums > Economics
Register FAQDonate PW Store PW Trivia Members List Calendar Search Today's Posts Mark Forums Read

Economics Discuss She's the poster child for estate tax repeal, but her sad family saga doesn't add up at the Political Forums; https://www.usatoday.com/story/opini...umn/930472001/ Republican Rep. Kristi Noem of South Dakota is one of the negotiators trying to reconcile the House and Senate ...

Share LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 12-11-2017, 10:41 PM
saltwn's Avatar
PW Enlightenment
Join Date: Oct 2007
Location: Esto perpetua
Posts: 82,492
Thanks: 55,866
Thanked 26,417 Times in 18,919 Posts
Send a message via AIM to saltwn Send a message via MSN to saltwn Send a message via Yahoo to saltwn
Default She's the poster child for estate tax repeal, but her sad family saga doesn't add up


Republican Rep. Kristi Noem of South Dakota is one of the negotiators trying to reconcile the House and Senate tax bills. No doubt House Speaker Paul Ryan views her as a strong voice for estate tax repeal, because of her personal story of how her farming family struggled to pay the tax.

The House bill would abolish the estate tax, a levy on the intergenerational transfer of immense wealth. The Senate version retains the tax but doubles the wealth exempted from the tax, to $22 million for a family.

Congressional Republicans and their backers have painted the estate tax as a major burden on the nation’s ranchers and farmers. Yet it's the heirs of multimillionaires and billionaires who actually pay it.

On April 16, 2015, Noem stepped onto the floor of the House and described how her father was killed on March 10, 1994 in a tragic accident on their family farm. Noem, who was a 21-year old student at the time, recounted:

"It wasn’t very long after he was killed that we got a bill in the mail from the IRS that said we owed them money because we had a tragedy that happened to our family … We could either sell land that had been in our family for generations or we could take out a loan. So I choose to take out a loan but it took us 10 years to pay off that loan to pay the federal government those death taxes. It is one of the main reasons I got involved in government and politics was because I didn’t understand how bureaucrats and politicians in Washington DC could make a law that says when a tragedy hits a family they somehow are owed something from that family business".
There are several important questions raised by Noem’s account. First, the estate tax has had a 100% marital deduction since 1982. In other words, upon the death of Noem’s father, all the family assets could have flowed to her mother without being subject to the estate tax. Noem’s parents were married and her mother, Corinne Arnold, is still alive today.
“It’s hard to believe the estate of a farmer who died in 1994 and was survived by his spouse was subject to tax,” said Robert Lord, a Phoenix tax attorney with an expertise in estate tax law. “It easily could have been deferred. That would have been a no-brainer.”
Another oddity in Noem’s story is that the IRS doesn’t send a bill for an estate tax without a tax filing. In 1994, families had nine months to file a return with the option of filing a six-month extension. The conservative canard that the taxman shows up at the funeral is emotionally gripping, but simply false. The law at the time allowed farms to defer estate taxes for up to five years.

In the event that the Arnold family did owe taxes, the IRS had flexible installment plan at an interest rate lower than any lender. There would have been no need to get a loan from a third-party. But this doesn’t answer the fundamental question: Why did they pay any tax?

“It’s very unclear they would have been subject to the estate tax given the law at the time,” said Lord. “But if she did pay a big estate tax bill. she should elaborate on the unusual circumstances.”

Noem is now at the center of the national debate over estate tax repeal and her personal story is regularly repeated as an example of how the estate tax hurts family farmers and ranchers. But things have changed a lot since 1994, when the amount of wealth exempted by the tax was $600,000 for an individual. The wealth exemption is now $5.49 million per person and $11 million per couple. Closely held businesses and farms have 14 years to pay the tax at low interest.
The number of farmers subject to the estate tax has been dramatically reduced as have the total number of estates. South Dakota is the state with the fewest taxable estates in the entire country, roughly 15 a year.
In her speeches attacking government overreach, Noem leaves out another important fact. Between 1995 and 2016, her family-owned Racota Valley Ranch in Hazel, S.D. cashed $3,704,415 in government farm subsidies. In 2012 alone, they accepted $232,707 in subsidies.

Given that Kristi Noem is now the national face for estate tax repeal, it would be reasonable to ask these simple questions:

Why did your family not use the spousal exemption to pass along assets to your mother and avoid any estate taxes?

Did you actually get a bill from the IRS? Please show evidence of this bill and the date (redacting out any personal financial information).

Did you actually get a loan from a third party to pay the taxes and from where?

If the government is so tyrannical, why has your family cashed over $3.7 million in taxpayer funded farm subsidy checks since 1995?

Losing one’s father and family breadwinner is a traumatic event. But 23 years later, this story is still being used to justify the elimination of a tax that is now exclusively paid by multimillionaires and billionaires. It applies to about 5,000 estates out of some 2.6 million deaths a year. That's two out of 1,000.
Doubling the estate tax exemption will cost an estimated $83 billion over the next decade while abolishing the estate tax will cost over $269 billion over the same period.
yes something's not right here
Happy 100th Birthday, Lois Dickenson Malone!
Reply With Quote

add, but, child, doesnt, estate, family, for, her, poster, repeal, sad, saga, she, tax, the

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On

Forum Jump

All times are GMT -5. The time now is 12:58 AM.

Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2020, vBulletin Solutions, Inc.

Content Relevant URLs by vBSEO 3.2.0