Want to torque off Republicans? Criticize the lax trust laws they’ve passed to make South Dakota a haven for wealthy tax dodgers. Rep. Susan Wismer (D-1/Britton) spoke up in House Judiciary Thursday about the 94 trusts holding $234 billion in secret cookie jars in our state:
She said trusts and video lottery are comparable, except trusts provide better-paying jobs. South Dakota has become a haven for “fiefdoms from generation to generation,” according to Wismer.
“It’s really nothing to be proud of,” she told other committee members and a room with many financial professionals.
“It’s the way South Dakota has struggled to find alternative sources of revenue that, really, in the long run are not good for democracy as a whole,” she said [Bob Mercer, “Wismer Rips Trusts, and Lust Blasts Her,” Rapid City Journal, updated 2018.01.18].
Rep. David Lust (R-34/Rapid City), who has helped rig our trust laws in favor of rich cash-stashers, took umbrage:
Video lottery is gambling, while trusts employed hundreds of people in positions higher than those commonly available to many working people, according to Lust, R-Rapid City.
“They’re intellectual-property jobs,” he said.
Lust said it was “incredibly naïve” that anyone could “think for an instant” the trusts wouldn’t be off-shore somewhere if they weren’t in South Dakota.
He described Wismer’s remarks as “a screed.”
“It’s just a jaded and biased opinion [Mercer, 2018.01.18].
Hmm… if the Sturgis Rally didn’t have prostitutes, all those biker-tourists would go elsewhere to buy sex. And top-tier hookers who come up with creative activities for their clients are doing intellectual-property jobs. So why do we keep hearing the “jaded and biased opinion” that prostitution is bad for South Dakota?
The Wismer/Lust exchange came in a hearing on House Bill 1072, the latest impenetrable revision of our trust laws written by trust lawyers for their own benefit. HB 1072 sailed through the House yesterday with minimal resistance.
South Dakota trusts and their clients pay no taxes on the assets under management. Trusts do pay fees—up to $30,000 a year—and bank tax on any income they make—at least $500 for new trusts, at least $25,000 after four years. In 2015, when South Dakota trusts held $175 billion, those fees and taxes added $1.1 million to South Dakota’s coffers.
$1.1 million out of $175 billion is 0.00063%. If you got that rate on your property tax on your $200,000 home, you’d pay $1.26.
Conversely, if trusts paid 0.1% property tax on the $234 billion in assets they hold (and that’s still far lower than the tax I’m paying on my house), they’d contribute $234 million toward the state that makes their intellectual property jobs and their clients’ assured and easy intergenerational wealth possible.
For perspective, the Governor’s proposed budget for the Board of Regents is $209 million. The proposed budget for corrections, the courts, the Legislature, the constitutional state offices, and other state government combined is $236 million.
But it’s just a jaded and biased opinion to suggest that South Dakota tax the property of individuals who enjoy the legal protections and services of our great state.