A Republican friend asked me last week how Congresswoman Kristi Noem’s work on the Trump tax cut bill might affect her campaign for governor.
The answer at the moment: negatively.
The Republican tax plan as it stands gets rid of Section 199, the Domestic Production Activities Deduction. Launched in 2005, Section 199 leaves as much as two billion dollars a year in farmers’ pockets. Land O’Lakes estimates Section 199 returned $113 million to its members.
Ag coops are up in arms. John Scott, president of Landus Coop in Iowa, says repealing Section 199 will raise taxes on Midwest grain farmers by more than 12%. Wheat Growers CEO Chris Pearson and National Council of Farmer Co-ops CEO Chuck Conner went to Washington to get South Dakota’s delegation on board with protecting Section 199, and while they say they got positive responses from Senators John Thune and Mike Rounds, they say self-professedly influential House Ways and Means member Kristi Noem didn’t have time to hear their concerns:
Pearson and Conner say that those provisions will not be enough to make up for the loss of Section 199. The two were unable to meet with Noem, even though Pearson said he modified the dates of his trip to be in Washington when her staff said she’d be available.
“In her run for governor she can’t say she’s done everything for farmers because she hasn’t in this case,” Pearson said [Victoria Lusk, “Co-ops: Tax Reform Could Hurt American Farmers,” Aberdeen American News, 2017.11.19].
Noem responds defensively:
“There has been nobody in that room that worked as hard for farmers and ranchers on this bill. I am a farmer, so of course I am going to have their backs,” Noem said. “At the end of the day, this bill is a huge win for agriculture and to look at one provision that isn’t there yet is unfair” [Lusk, 2017.11.19].
I suspect Conner and Pearson would like to remind Noem of the scientific definition of work: force applied over a distance. You can push all day, but if you don’t move Section 199 back into effect, you haven’t done the work the co-ops want, and that’s $2 billion a year in continued tax relief. (I also wonder if practicing agriculturalists would accept Noem’s claim that she is currrently farming, or if anyone can show any evidence of Noem doing any “farming” in the last eight years at any time when her campaign camera crew isn’t present.)
Kristi Noem claimed that abandoning her seat on the House Agriculture Committee would be good for South Dakota. Yet in her position on House Ways and Means, she was either unwilling to stop, unable to stop, or unaware of the effort to repeal Section 199.
Raising taxes on farmers—that sure doesn’t sound like a good campaign slogan for someone who wants to be South Dakota’s next governor.
Noem has never farmed according to the people in here neck of the woods. She is getting a check from FSA because her dad was killed in a farm accident, and she was one of the heirs. She has a hobby farm where she raises horses. She has never owned a business either. The food establishment she helped her mother with was not hers. Noem also claimed her family had to sell part of the family operation to pay the “Death Tax” when here dad was killed, but has never provided any accounting of those facts.
Are coops tax free? What is the break that will end. Will it actually become a level playing field, or is this an unfair tax that they would get?
Wait a minute. Rep. Noem is claiming credit for passing the house bill, and she’s talking it up. How can she deny blame for shortcomings in the house bill? She’s talking out of both sides of her mouth.
That’s an important point. She voted for the bill. She’s taking credit for the bill. She can’t then talk about not supporting a provision that’s in the bill or try hiding behind some provision that isn’t there yet.
Co-ops pay dividends to patrons and then those patrons pay taxes because it is income to them.
You know what? This may sound childish and churlish, but I’m done with sympathy or worry for farmers and ranchers. Why? Because THEY HAVE CONSISTENTLY VOTED FOR THIS CRAP, despite ample evidence that NOem did NOT have their backs during her so-called “representation” and that she was just paying lip service to farmers and ranchers, knowing that because she has the almighty omnipotent “R” in front of her name that it wouldn’t matter. THEY are responsible for their own plight.
Cory,
During my “short”time in the legislature I have decided that we pay for more lobbying organizations than we need in our little state. We pay membership dues for groups whose reasons for existing are to make headlines in order to sell membership dues, and pay the salespeople whose salaries depend on commissions they earn by going door to door in rural communities selling to people who are too nice to tell them they aren’t going to write a check. They make their headlines by repeating ad nauseum what they stand for or against: SDFB: against estate tax and the feds interfering with mud puddles, for unlimited subsidies; SD Retailers: in favor of paying retailers for collecting the sales tax, against anything that smacks of taxes or regulation even if it would really help the members’ communities; SD Chamber: against taxes, for workforce subsidies; NFIB: they’re just out to collect dues for uttering the words “we work for small business”, even though they work against the interest of any small SD community that wants to remain viable and maintain its school, hospital, or nursing home. Throw commodity councils in with SDFB. And because of incongruent choices made by the board of the SD Association of Cooperatives over the years, you can throw them in with SDFB and the commodity councils. That’s not where their heritage is, but that is where they are. They flourish very well in this life is simple, single issue, buzz word, I can memorize the spiel, climate.
But I digress, as usual. Unfortunately, the big cooperatives have excess executive manpower, enough to devote resources to whining about losing a tax benefit, no matter how logical the change is in the overall scheme of things. The Section 199 deduction is subject to calculation errors, subject to claims of ignorance and therefore abuse, it complicates tax returns (something GOP claims to want to change) and is a type of double deduction that never should have been introduced to the tax code in the first place. If it’s needed to pay for some other simplifications, kudos to Congress for recognizing it as a good trade-off, and shame on cooperatives for playing the same “fight to the death” game we accuse Congress of playing when they insist on trying to write a law without consulting the other side.
Some people are like Joe Manchin. They proclaim to be Dems but actually…. If 199 helps at all, Noem should have fought for it. She is supposed to be caring about our state. I have yet to see anything that proves it. Farmers and Ranchers, keep voting Red. You will get what you deserve.