Noem Wrong: Tax Code Not 10 or 7 Times Longer Than Bible, Filled with Good News
Published 2015-04-16 by
Cory Allen Heidelberger
SDPB gave Kristi Noem a tax-deadline platform yesterday to throw her sour grapes at the government she’s supposed to be helping to run. Noem recycled a line she used in a February 17, 2015 town hall meeting in Sioux Falls:
Math and English—still so very hard for Congresswoman Kristi Noem.
Noem started her town hall by explaining her reasons for taking a seat on the House Ways and Means Committee. After Congress passed a new Farm Bill last year, Noem said she felt that agriculture policy would be slower for the foreseeable future, so she jumped to the new committee. She said she’s hopeful the committee can help encourage trade agreements that open more markets to South Dakota products, and she said that job growth lies in opening overseas markets.The committee also will serve as a catalyst for tax reform, she said.
“The tax code is seven times longer than the Bible and it has none of the good news,” she said [Jonathan Ellis, “Noem Wants Tougher GOP Senate,” that Sioux Falls paper, 2015.02.17].
First, I will work to update and simplify the tax code, which hasn’t been done since gas cost less than 90 cents a gallon. Over the last 25-plus years, special interest groups have manipulated the tax code time and again, carving out so many loopholes that we now have a 73,954-page-long tax code. As a friend of mine says, that’s 10 times longer than the Bible with none of the Good News! [Rep. Kristi Noem, press release, 2014.12.31]
Evidently the tax code has shrunk 30% this year. Hooray!
But more important than checking Noem’s out-of-her-raggedy-baseball-cap numbers is knocking down her glib fundie-winking dismissal of the entire tax code. There’s plenty of good news in the tax code, such as…
The standard deduction, $6,200 per person of income that Uncle Sam doesn’t tax.
The personal exemption, another $3,950 of your income left untouched by the feds.
Pause, Kristi: if you and Bryon are still claiming your college girls, then your five-person family gets the first $24,250 of your 2014 income tax-free. For a family that has relied on government assistance for so much other income, I suppose this freebie is small potatoes, but it’s still good news.
The child tax credit, which knocks $1,000 off your taxes for every child you are raising. If you owe Uncle Sam $2,500 but you have three qualifying children, not only do you owe no tax, but the IRS will send you the $500 difference. That’s good news!
The earned income tax credit, which rewards millions of low-income taxpayers for going to work and drawing a paycheck. In 2014, 28 million Americans got an average EITC of $2,407. That $66 billion dollars of economic stimulus lifted 6.5 million people, including 3.3 million children out of poverty. That’s great news!
The mortgage interest deduction, which means you aren’t taxed on the money you spend paying off your American Dream. That’s good news at the bank!
The self-employed business deduction, which means you aren’t taxed on all the money you spend trying to build your own business. That’s good news for any entrepreneur!
The tax filing extension, which lets any American apply for a six-month extension of time to file his or her tax return at no extra cost.
We can dig through that complicated tax code for other bits of good news for various Americans. We can find plenty of bad, too, like the corporate welfare that busts our budget or the exemption of income above $118,500 from Social Security tax that leaves our common retirement in more peril than it need be. But please, Kristi, don’t come trotting out your glib oversimplifications. They just aren’t true.
Noem’s prevarications have become the normal for our Republican representatives. For example, John Thune’s April 13th RCJ editorial advocating repeal of the “death tax” was chock full of misleading statements and false innuendos. He did not disclose that “The federal estate tax exemption—that’s the amount an individual can leave to heirs without having to pay federal estate tax—will be $5.43 million in 2015.”
Instead, Thune wrote that it is an “injustice” to tax amounts over the $5.43 million exemption (again with no actual disclosure of the exempt amount), and that many South Dakotans “have witnessed this injustice first hand – a friend, neighbor or acquaintance who fell victim to the estate tax, also known as the death tax.”
Really? Our friends, neighbors and acquaintances only inherited over $5+million tax free, but then had to pay a tax on amounts exceeding this $5+ million exemption? Come on John, get real. As Fact-Check reveals: “due to various exemptions in the law, only a tiny fraction of farms in South Dakota, or any other state, actually paid the estate tax in 2013.”
Several of Thune’s other distortions were exposed by Fact-Check:
Times have changed such that for our current elected officials the values of honesty and integrity seem to be slipping farther and farther into history.
Self-serving memes over honesty every time, Bear. It’s depressing. Where are the candidates who can change that, who can tell Americans the truth about taxes and the price of good government?
Nick Nemec
The true threat to passing family farms down to a younger generation at death is all the non farming siblings who want their money and want it now. In my township two farms were sold off piecemeal this past winter because non farming, often out of state heirs forced a sale. Neither of these farms were valued over $11,000,000.
Thune is either ignorant or knows he’s lying.
mike from iowa
Only about ,2% of the population will be affected by the estate tax.
Porter Lansing
While your item #5, mortgage interest deduction aka “white welfare” is good news for many it’s an unfair gift to those with more and discounts the renters and non property owners in the lower and middle class. It was enacted by the Tax Reform Act of 1986 when Republicans controlled the Senate. President Reagan signed it, to secure and benefit white voters. If conservatives can’t tolerate the earned income tax credit how can they justify a tax break so non-uniformly applied to USA citizens?
rwb
The reality is that very few wealthy people even pay that tax because they did some actual estate planning. Thune has several “Sky Is Falling” issues, and this has always been one because of the ignorance out in the country. You’ll remember back to the “Cow Fart Incident” and chuckle because it’s on the same basic level of exploiting the ignorance of the country folk.
As Nic Nemec points out, the combined excluded amount is around $11 million for a married couple – and that’s without doing any estate planning whatsoever. Given that and some other gifting strategies, the federal estate tax doesn’t touch hardly anyone. But Thune still throws the spoiled red meat out there to anyone ignorant enough to eat it.
And Nic Nemec, the true threat to passing down family farms or businesses is the (i) refusal to do legitimate estate planning or (ii) having done a very bad estate plan with very weak (and self-serving) legal work. Given the cases I’ve witnessed up-close over the last twenty years, I don’t have any sympathy for those in the (i) category and have a huge degree of disdain for the bad lawyers who put people in the (ii) category. I wish there was some way people could sue these incompetent or malicious lawyers for their bad work, but in South Dakota that ain’t happening anytime soon.
In the meantime, I am enjoying the babble exuding from the Clown Car. I used to be disgusted. Now I’m just amused.
Lanny V Stricherz
I hope none of you will break into tears over this letter from Kristi under the heading House passes reapeal of the death tax. Please be sure to have some tissues handy in case you do.
Dear Friend,
I was 21 when my dad passed away in a farming accident. To me, he was Superman – my best friend. I knew from the time I was young that his dream was to pass the family farm onto us kids. That’s why he got up at 5:00 almost every morning. He wanted to give us the opportunity to farm together, if we wanted to.
After the accident, we got a letter from the IRS telling us that we owed the death tax. We had land, cattle, and machinery, but not necessarily money in the bank. All I could hear in my head was my dad saying, “Kristi, don’t sell the land. God isn’t making any more.” So we decided to take out a loan. It impacted nearly every decision we made for a decade.
I have never understood why the federal government thought it was appropriate to go after families with this double tax – especially in a time of crisis. My dad had already paid taxes on the equipment, the land, and any money we had in the bank. Now, we had to pay taxes on it again because he had died. It wasn’t right.
Earlier today, the House passed a full and permanent repeal of the death tax. While the administration has already threatened to veto the bill if it makes it to the President’s desk, I am committed to pushing legislation like this forward because no family should have to go through what ours did.
I know this is an important issue to many South Dakota farmers, ranchers, and small businesses and in the last few days, I’ve heard from folks across the country who have a story similar to mine – folks who were billed by the IRS because of a tragedy. We haven’t reached the finish line yet, but we’re one step closer.
All the best,
Kristi
bearcreekbat
Lanny, my calculations indicate that Noem was 21 years old in 1993 and at that time the estate tax exemption was $600,000. This means that Noem’s farm was valued at over $600,000 in 1993 if she is telling the truth in this letter. The initial rate for amounts in excess of $600,000 was 18%. The highest rate was 55% and only kicked in if the farm was worth over $3,000,000. See:
So the Noem family must have been awfully rich if the value of the farm was so much more than $600,000 in 1993 that they had to take out a loan to raise the funds to pay the estate tax. How sad, one of South Dakota’s richest families actually had to pay 18% taxes on their resources in excess of $600,000.
jake kammerer
I can remember Napoli and others of Republican nature when SD leg got rid of the so-called “death tax” and their crying towels were wet all the while they talked. Now nationally the likes of Noem, Rounds/ Thune take up the waterbag of the ultra rich like Koch brothers and heirs of billionaires that can never get enough of the $$$. Addiction worse than drugs or sex and society suffers after having made those heirs richer/wealthier than they probably deserve. But, what else can they do after they’ve sold their souls out to the siren ca of the money that got them national prominence>>>>>??????
jake kammerer
‘siren call” of the money, sorry
grudznick
Many do miss the days when Mr. Napoli ruled the legislatures with his steel fist.
grudznick
Mr. bat, I do not argue with your math which seems not French at all. I only wonder what the value of land per acre was in her neck of the prairie back then and how many acres her pa had.
Don Coyote
“6. The self-employed business deduction, which means you aren’t taxed on all the money you spend trying to build your own business. That’s good news for any entrepreneur!”
Hahahaha. That’s a good one Cory. That’s a long overdue deduction finally, finally put into play (2013 if my memory is correct) to correct for the self-employed having to pay both sides of the FICA tax (SS and Medicare) but not being able to claim the employer’s side as a business expense. The FICA taxes are still being paid but now the little guy is treated just like the big corporation in he is allowed to treat the FICA taxes as a business expense lowering his net tax liability while still getting a proper accounting of the employer contributions to his/her SS account which is used to determine the distributions when he/she retires. Good news? Nope just a modicum of tax fairness for the self-employed who’s been jacked around for years by the government.
Thune has said that this tax affects 30% of South Dakotans. I’d like to know where he gets his figures. It seems high but if its true what percentage are living off the government teat?
And don’t forget, bearcreekbat, Kristi and the Noem-Arnold clan proceeded to milk the government for over three million in farm subsidies. They came out just fine, even with the estate tax in effect.
Come on, Don. You’re so committed to rebutting me for the sake of rebuttal that you can’t acknowledge the simple meaning of words. As a small businessman, I get to deduct my business expenses from my income, before calculating the tax. That’s good news, period.
jana
I wonder just how many words of the demon tax code Kristi rals on are dedicated to the benefit of the wealthy and corporations that fund campaigns like kristi’s.
Maybe someone on her staff will get back to us on that.
Congresspeople are always quick to complain about the tax code, but they fail to acknowledge they are the ones who have created it. This isn’t something they can blame on the President or the IRS – but upon themselves.
They trot out these same tired talking points year after year, campaign after campaign, but no true reform ever occurs. If they want to impress me they will start over. Begin by saying the first [X] dollars you earn are tax free. Then enact a series of progressive/tiered levels at which our income is taxed beyond that point. Start at a 10% level, then the next stage can be 15%, the next 20% and so on and so forth until you have a maximum taxable rate of 75%. This encourages investment today rather than investment in trust funds for future generations. Have similar tiered rates for Businesses and Corporations.
No need to complex deductions. No need for loopholes. If you want to buy a house then do it… because with a simplified tax code you’ll have more of your own money left to pay for it and you won’t need a mortgage interest deduction. You want to have a large family then do it… but that is your choice and you shouldn’t be encouraged to have more children (never mind the fact that I have yet to meet a parent who said they decided to have that extra kid for a tax deduction, nor have I met one who said the deduction wasn’t large enough and therefore they decided against adding to their brood).
You want to buy a fuel efficient vehicle? That’s your choice. You want to install solar panels on your roof? Again your choice. You want to donate to your local church or school? Your choice. We shouldn’t reward every good deed with some crazy deduction.
A simplified code would put more money in the average American’s pockets and would benefit the lower and middle classes. It is that simple. Which is exactly why it will never happen.
Don Coyote
@Cory: You’re confused. I’m not committed to coming here to rebut you, I come to refute you and nothing that I stated about the self-employment tax/deduction was incorrect (except for 2013 as being the start date for the self-employment deduction. A quick glance at other returns as I filed 2014’s “good news” showed it began in 2010).
You look at our tax system and see a glass half full. All I see is a dribble glass, a prank played out through the years costing me thousands of dollars with a system that was stacked against the self-employed. Thousands more were confiscated by the government by not giving me and others purchasing their health care a deduction on the premiums while those who received health insurance through their employers enjoyed a tax break that most weren’t aware they were getting. Thankfully that injustice has been put to bed. Sorry I can’t share in your delight with the “good news” that the government doesn’t have their grubby paws in my wallet as often. I’m sure as the wind will shift that that will change.
bearcreekbat
Don Coyote needs a better CPA to do his taxes. Self employed folks typically have more opportunities for deductions than any employee, including expensing away purchases, depreciation of any major asset, mileage allowances, etc, etc, etc. Been there, done that.
And the best news of all – self-employed folks who still have to pay some taxes, after taking all the various deductions and depreciation allowances, necessarily have earned substantial profits, which is a good thing. Sharing some of those profits by paying taxes that can be used to fund government programs that are designed to make everyone’s life safer and happier could be a source of pride rather than the path to anger and greed.
Joan Brown
From what I have heard about the accident that killed Noem’s Dad, and being from that part of the country, I would be willing to bet the Arnolds were quite well to do at the time of the accident. I was no longer living at home at that time, but from what I have heard the farm equipment that killed Mr. Arnold wasn’t something that the average farmer had. Anyway when I was growing up in the area it was only the more well to do farmer’s that had the type of equipment and I have no idea what the name of the equipment was—–I just was never a farm girl, even though I grew up on a farm. That being said I’m sure the Arnolds could have spared a small chunk of their land. We all know Kristi and her husband aren’t farming. I don’t know about her siblings. I would be willing to bet there would have been a neighbor that would have been willing to buy a portion of the land and that it wouldn’t have been developed. I’m sure her father would have preferred they sell some of the land instead of taking out a loan. At least selling some of the land would have guaranteed security for the family. This is pure speculation on my part, but I don’t have a lot of sympathy for rich people whining about having to pay a small portion of inheritance tax.
Joan, I don’t have numbers from the mid-1990s, but as Michael Larson pointed out this week, only 0.12% of estates had to pay any estate tax last year. The estate tax is a bogeyman trotted out by Noem and Thune to distract us from the good things the tax code does for lots of citizens and from their failure to govern.
Good call, Bear. Don is just looking to throw partisan yahoo mud, not address how the tax code really works to bring good news to the self-employed. When I buy a chair, web hosting, and stamps for my personal use, I don’t get to deduct those items from my taxes. When I buy those same things for blogging, I get to deduct those costs from my income and reduce my taxes by 10, 15, or 25 cents on each dollar spent, depending on which tax bracket the rest of our income lands us in.
Noem’s prevarications have become the normal for our Republican representatives. For example, John Thune’s April 13th RCJ editorial advocating repeal of the “death tax” was chock full of misleading statements and false innuendos. He did not disclose that “The federal estate tax exemption—that’s the amount an individual can leave to heirs without having to pay federal estate tax—will be $5.43 million in 2015.”
http://www.forbes.com/sites/ashleaebeling/2014/10/30/irs-announces-2015-estate-and-gift-tax-limits/
Instead, Thune wrote that it is an “injustice” to tax amounts over the $5.43 million exemption (again with no actual disclosure of the exempt amount), and that many South Dakotans “have witnessed this injustice first hand – a friend, neighbor or acquaintance who fell victim to the estate tax, also known as the death tax.”
Really? Our friends, neighbors and acquaintances only inherited over $5+million tax free, but then had to pay a tax on amounts exceeding this $5+ million exemption? Come on John, get real. As Fact-Check reveals: “due to various exemptions in the law, only a tiny fraction of farms in South Dakota, or any other state, actually paid the estate tax in 2013.”
Several of Thune’s other distortions were exposed by Fact-Check:
http://www.factcheck.org/2015/03/thunes-estate-tax-distortions/
Times have changed such that for our current elected officials the values of honesty and integrity seem to be slipping farther and farther into history.
Self-serving memes over honesty every time, Bear. It’s depressing. Where are the candidates who can change that, who can tell Americans the truth about taxes and the price of good government?
The true threat to passing family farms down to a younger generation at death is all the non farming siblings who want their money and want it now. In my township two farms were sold off piecemeal this past winter because non farming, often out of state heirs forced a sale. Neither of these farms were valued over $11,000,000.
Thune is either ignorant or knows he’s lying.
Only about ,2% of the population will be affected by the estate tax.
While your item #5, mortgage interest deduction aka “white welfare” is good news for many it’s an unfair gift to those with more and discounts the renters and non property owners in the lower and middle class. It was enacted by the Tax Reform Act of 1986 when Republicans controlled the Senate. President Reagan signed it, to secure and benefit white voters. If conservatives can’t tolerate the earned income tax credit how can they justify a tax break so non-uniformly applied to USA citizens?
The reality is that very few wealthy people even pay that tax because they did some actual estate planning. Thune has several “Sky Is Falling” issues, and this has always been one because of the ignorance out in the country. You’ll remember back to the “Cow Fart Incident” and chuckle because it’s on the same basic level of exploiting the ignorance of the country folk.
As Nic Nemec points out, the combined excluded amount is around $11 million for a married couple – and that’s without doing any estate planning whatsoever. Given that and some other gifting strategies, the federal estate tax doesn’t touch hardly anyone. But Thune still throws the spoiled red meat out there to anyone ignorant enough to eat it.
And Nic Nemec, the true threat to passing down family farms or businesses is the (i) refusal to do legitimate estate planning or (ii) having done a very bad estate plan with very weak (and self-serving) legal work. Given the cases I’ve witnessed up-close over the last twenty years, I don’t have any sympathy for those in the (i) category and have a huge degree of disdain for the bad lawyers who put people in the (ii) category. I wish there was some way people could sue these incompetent or malicious lawyers for their bad work, but in South Dakota that ain’t happening anytime soon.
In the meantime, I am enjoying the babble exuding from the Clown Car. I used to be disgusted. Now I’m just amused.
I hope none of you will break into tears over this letter from Kristi under the heading House passes reapeal of the death tax. Please be sure to have some tissues handy in case you do.
Dear Friend,
I was 21 when my dad passed away in a farming accident. To me, he was Superman – my best friend. I knew from the time I was young that his dream was to pass the family farm onto us kids. That’s why he got up at 5:00 almost every morning. He wanted to give us the opportunity to farm together, if we wanted to.
After the accident, we got a letter from the IRS telling us that we owed the death tax. We had land, cattle, and machinery, but not necessarily money in the bank. All I could hear in my head was my dad saying, “Kristi, don’t sell the land. God isn’t making any more.” So we decided to take out a loan. It impacted nearly every decision we made for a decade.
I have never understood why the federal government thought it was appropriate to go after families with this double tax – especially in a time of crisis. My dad had already paid taxes on the equipment, the land, and any money we had in the bank. Now, we had to pay taxes on it again because he had died. It wasn’t right.
Earlier today, the House passed a full and permanent repeal of the death tax. While the administration has already threatened to veto the bill if it makes it to the President’s desk, I am committed to pushing legislation like this forward because no family should have to go through what ours did.
I know this is an important issue to many South Dakota farmers, ranchers, and small businesses and in the last few days, I’ve heard from folks across the country who have a story similar to mine – folks who were billed by the IRS because of a tragedy. We haven’t reached the finish line yet, but we’re one step closer.
All the best,
Kristi
Lanny, my calculations indicate that Noem was 21 years old in 1993 and at that time the estate tax exemption was $600,000. This means that Noem’s farm was valued at over $600,000 in 1993 if she is telling the truth in this letter. The initial rate for amounts in excess of $600,000 was 18%. The highest rate was 55% and only kicked in if the farm was worth over $3,000,000. See:
http://www.irs.gov/pub/irs-soi/ninetyestate.pdf
So the Noem family must have been awfully rich if the value of the farm was so much more than $600,000 in 1993 that they had to take out a loan to raise the funds to pay the estate tax. How sad, one of South Dakota’s richest families actually had to pay 18% taxes on their resources in excess of $600,000.
I can remember Napoli and others of Republican nature when SD leg got rid of the so-called “death tax” and their crying towels were wet all the while they talked. Now nationally the likes of Noem, Rounds/ Thune take up the waterbag of the ultra rich like Koch brothers and heirs of billionaires that can never get enough of the $$$. Addiction worse than drugs or sex and society suffers after having made those heirs richer/wealthier than they probably deserve. But, what else can they do after they’ve sold their souls out to the siren ca of the money that got them national prominence>>>>>??????
‘siren call” of the money, sorry
Many do miss the days when Mr. Napoli ruled the legislatures with his steel fist.
Mr. bat, I do not argue with your math which seems not French at all. I only wonder what the value of land per acre was in her neck of the prairie back then and how many acres her pa had.
“6. The self-employed business deduction, which means you aren’t taxed on all the money you spend trying to build your own business. That’s good news for any entrepreneur!”
Hahahaha. That’s a good one Cory. That’s a long overdue deduction finally, finally put into play (2013 if my memory is correct) to correct for the self-employed having to pay both sides of the FICA tax (SS and Medicare) but not being able to claim the employer’s side as a business expense. The FICA taxes are still being paid but now the little guy is treated just like the big corporation in he is allowed to treat the FICA taxes as a business expense lowering his net tax liability while still getting a proper accounting of the employer contributions to his/her SS account which is used to determine the distributions when he/she retires. Good news? Nope just a modicum of tax fairness for the self-employed who’s been jacked around for years by the government.
Estate Tax Exemptions and Tax Rates
(1) (2) (3) (4)
1916……………….. 50,000 1.0 10.0 5,000,000
1917……………….. 50,000 2.0 25.0 10,000,000
1918-1923……….. 50,000 1.0 25.0 10,000,000
1924-1925……….. 50,000 1.0 40.0 10,000,000
1926-1931……….. 100,000 1.0 20.0 10,000,000
1932-1933……….. 50,000 1.0 45.0 10,000,000
1934……………….. 50,000 1.0 60.0 10,000,000
1935-1939……….. 40,000 2.0 70.0 50,000,000
1940 [1]…………… 40,000 2.0 70.0 50,000,000
1941……………….. 40,000 3.0 77.0 10,000,000
1942-1976……….. 60,000 3.0 77.0 10,000,000
1977 [2]…………… 120,000 18.0 70.0 5,000,000
1978……………….. 134,000 18.0 70.0 5,000,000
1979……………….. 147,000 18.0 70.0 5,000,000
1980……………….. 161,000 18.0 70.0 5,000,000
1981……………….. 175,000 18.0 70.0 5,000,000
1982……………….. 225,000 18.0 65.0 4,000,000
1983……………….. 275,000 18.0 60.0 3,500,000
1984……………….. 325,000 18.0 55.0 3,000,000
1985……………….. 400,000 18.0 55.0 3,000,000
1986……………….. 500,000 18.0 55.0 3,000,000
1987-1997 [3]…… 600,000 18.0 55.0 3,000,000
1998……………….. 625,000 18.0 55.0 3,000,000
1999……………….. 650,000 18.0 55.0 3,000,000
2000-2001……….. 675,000 18.0 55.0 3,000,000
2002……………….. 1,000,000 18.0 50.0 3,000,000
2003……………….. 1,000,000 18.0 49.0 3,000,000
2004……………….. 1,500,000 18.0 48.0 3,000,000
2005……………….. 1,500,000 18.0 47.0 3,000,000
2006……………….. 2,000,000 18.0 46.0 3,000,000
2007……………….. 2,000,000 18.0 45.0 3,000,000
[1] 10-percent surtax was added.
[2] Unified credit replaces exemption.
[3] Graduated rates and unified credits phased out for estates greater than $10,000,000.
Top bracket
(dollars)
Top rate
(percent) Year Exemption
(dollars)
Initial rate
(percent)
F
Thune has said that this tax affects 30% of South Dakotans. I’d like to know where he gets his figures. It seems high but if its true what percentage are living off the government teat?
And don’t forget, bearcreekbat, Kristi and the Noem-Arnold clan proceeded to milk the government for over three million in farm subsidies. They came out just fine, even with the estate tax in effect.
Come on, Don. You’re so committed to rebutting me for the sake of rebuttal that you can’t acknowledge the simple meaning of words. As a small businessman, I get to deduct my business expenses from my income, before calculating the tax. That’s good news, period.
I wonder just how many words of the demon tax code Kristi rals on are dedicated to the benefit of the wealthy and corporations that fund campaigns like kristi’s.
Maybe someone on her staff will get back to us on that.
The final word, what he said:
https://www.youtube.com/watch?v=Nn_Zln_4pA8
Congresspeople are always quick to complain about the tax code, but they fail to acknowledge they are the ones who have created it. This isn’t something they can blame on the President or the IRS – but upon themselves.
They trot out these same tired talking points year after year, campaign after campaign, but no true reform ever occurs. If they want to impress me they will start over. Begin by saying the first [X] dollars you earn are tax free. Then enact a series of progressive/tiered levels at which our income is taxed beyond that point. Start at a 10% level, then the next stage can be 15%, the next 20% and so on and so forth until you have a maximum taxable rate of 75%. This encourages investment today rather than investment in trust funds for future generations. Have similar tiered rates for Businesses and Corporations.
No need to complex deductions. No need for loopholes. If you want to buy a house then do it… because with a simplified tax code you’ll have more of your own money left to pay for it and you won’t need a mortgage interest deduction. You want to have a large family then do it… but that is your choice and you shouldn’t be encouraged to have more children (never mind the fact that I have yet to meet a parent who said they decided to have that extra kid for a tax deduction, nor have I met one who said the deduction wasn’t large enough and therefore they decided against adding to their brood).
You want to buy a fuel efficient vehicle? That’s your choice. You want to install solar panels on your roof? Again your choice. You want to donate to your local church or school? Your choice. We shouldn’t reward every good deed with some crazy deduction.
A simplified code would put more money in the average American’s pockets and would benefit the lower and middle classes. It is that simple. Which is exactly why it will never happen.
@Cory: You’re confused. I’m not committed to coming here to rebut you, I come to refute you and nothing that I stated about the self-employment tax/deduction was incorrect (except for 2013 as being the start date for the self-employment deduction. A quick glance at other returns as I filed 2014’s “good news” showed it began in 2010).
You look at our tax system and see a glass half full. All I see is a dribble glass, a prank played out through the years costing me thousands of dollars with a system that was stacked against the self-employed. Thousands more were confiscated by the government by not giving me and others purchasing their health care a deduction on the premiums while those who received health insurance through their employers enjoyed a tax break that most weren’t aware they were getting. Thankfully that injustice has been put to bed. Sorry I can’t share in your delight with the “good news” that the government doesn’t have their grubby paws in my wallet as often. I’m sure as the wind will shift that that will change.
Don Coyote needs a better CPA to do his taxes. Self employed folks typically have more opportunities for deductions than any employee, including expensing away purchases, depreciation of any major asset, mileage allowances, etc, etc, etc. Been there, done that.
And the best news of all – self-employed folks who still have to pay some taxes, after taking all the various deductions and depreciation allowances, necessarily have earned substantial profits, which is a good thing. Sharing some of those profits by paying taxes that can be used to fund government programs that are designed to make everyone’s life safer and happier could be a source of pride rather than the path to anger and greed.
From what I have heard about the accident that killed Noem’s Dad, and being from that part of the country, I would be willing to bet the Arnolds were quite well to do at the time of the accident. I was no longer living at home at that time, but from what I have heard the farm equipment that killed Mr. Arnold wasn’t something that the average farmer had. Anyway when I was growing up in the area it was only the more well to do farmer’s that had the type of equipment and I have no idea what the name of the equipment was—–I just was never a farm girl, even though I grew up on a farm. That being said I’m sure the Arnolds could have spared a small chunk of their land. We all know Kristi and her husband aren’t farming. I don’t know about her siblings. I would be willing to bet there would have been a neighbor that would have been willing to buy a portion of the land and that it wouldn’t have been developed. I’m sure her father would have preferred they sell some of the land instead of taking out a loan. At least selling some of the land would have guaranteed security for the family. This is pure speculation on my part, but I don’t have a lot of sympathy for rich people whining about having to pay a small portion of inheritance tax.
Joan, I don’t have numbers from the mid-1990s, but as Michael Larson pointed out this week, only 0.12% of estates had to pay any estate tax last year. The estate tax is a bogeyman trotted out by Noem and Thune to distract us from the good things the tax code does for lots of citizens and from their failure to govern.
Good call, Bear. Don is just looking to throw partisan yahoo mud, not address how the tax code really works to bring good news to the self-employed. When I buy a chair, web hosting, and stamps for my personal use, I don’t get to deduct those items from my taxes. When I buy those same things for blogging, I get to deduct those costs from my income and reduce my taxes by 10, 15, or 25 cents on each dollar spent, depending on which tax bracket the rest of our income lands us in.