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Thursday, February 20, 2025

Senator John Thune pushes for permanent repeal of federal estate tax

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Senator John Thune, US Senator for South Dakota | Official U.S. Senate headshot

Senator John Thune, US Senator for South Dakota | Official U.S. Senate headshot

U.S. Senate Majority Leader John Thune has announced his intention to introduce a bill aimed at repealing the federal estate tax, commonly referred to as the "death tax." In a speech delivered on the Senate floor, Thune highlighted the challenges that this tax presents, particularly for family-owned farms and small businesses.

Thune expressed pride in having contributed to doubling the death tax exemption through the 2017 Tax Cuts and Jobs Act. However, he noted that this expanded exemption is set to expire at the end of 2025. He emphasized his hope not just for an extension but for a complete repeal of what he describes as a "fundamentally flawed" tax.

"There should be a limit to how many times the government can tax you," Thune stated, arguing that assets taxed after death have already been subject to taxation during an individual's lifetime. He contended that the revenue generated from this form of double taxation is minimal compared to its economic impact.

The senator also addressed misconceptions about who is affected by the estate tax, asserting that it does not solely target wealthy individuals. According to Thune, family farms and small businesses often find themselves caught up in these regulations due to their asset-heavy but cash-poor nature.

"A farmer might have substantial-looking assets on paper, but the vast majority of that is land and farming equipment," he explained. The valuation discrepancies between actual agricultural productivity and perceived asset value can lead heirs to sell off parts or all of their inherited properties just to cover federal taxes.

Thune underscored the broader implications for rural communities like those in South Dakota if local farms are sold off or acquired by out-of-state corporations with little interest in community development. He also mentioned how time-consuming and costly estate planning efforts detract from business growth opportunities.

Quoting one of his Democratic colleagues from Washington, Thune reiterated that "the estate tax is bad for businesses... workers... new job creation... [and] our communities."

In conclusion, Thune expressed gratitude towards his Republican colleagues who support this legislative effort and voiced optimism about potentially eliminating what he sees as a burdensome policy within 2025.

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