Feb. 5- U.S. Senator John Thune (R-S.D.), member of the tax-writing Senate Finance Committee, questions U.S. Department of Treasury Secretary Jack Lew about the president’s proposal to add a second death tax on family farms and businesses.
A news release today from Sen. Thune indicated that, “[Sen. Thune] today at a hearing before the Senate Finance Committee questioned U.S. Department of Treasury Secretary Jack Lew about the Obama administration’s proposal to institute a second death tax on South Dakota family farms and businesses. Thune offered an example of how the administration’s capital gains proposal will negatively impact family farms in South Dakota and called on the secretary to explain the intent behind their capital gains proposal.
“‘[The administration’s] proposal, if enacted, would have a devastating impact on family farms and small businesses in my state of South Dakota. I want to give you an example… if you take a typical family farm that bought…640 acres back in 2000 for $640,000, which…in South Dakota that would be considered a small farm. Today that same farmland is probably worth somewhere between $3.5 million and $4.5 million, depending on where it’s located.
“‘So under the current estate tax law, which excludes assets up to $5.43 million, the family farm isn’t taxed when it passes from one generation to the next. Now under the administration’s proposal, this family farm would be hit with a significant tax when the family farm is transferred to the next generation of family members. …so in that example this South Dakota family would suddenly find themselves facing a tax bill of $1 million or more.'”