“It’s hard to believe the estate of a farmer who died in 1994 and was survived by his spouse was subject to tax,” said Robert Lord, a Phoenix tax attorney with an expertise in estate tax law. If they had set up trusts or other arrangements that backfired, Noem should explain this.
Noem’s claim that the IRS sent a bill “within a few months” is also suspect. In 1994, families had 9 months to file an estate tax return with the option of filing a six-month extension. Tax payments could be deferred for 5 years. The IRS would not have sent a letter without a filing. This is the usual conservative demagoguery about the “taxman showing up at the funeral.” While certainly dramatic sounding, it is factually wrong.
Despite Noem’s speeches railing against taxes and big government, she has shown no hesitation in cashing millions in taxpayer-funded farm subsidies.
Between 1995 and 2016, her family-owned Racota Valley Ranch in Hazel, South Dakota deposited over $3.7 million in government farm subsidies. In 2012 alone, they cashed $232,707 in subsidy checks, according to the Environmental Working Group Farm Subsidy Database.
One has to wonder at the hypocrisy of taking millions of dollars in taxpayer money for herself while at the same time calling for deep cuts to basic public programs triggered by deep tax cuts for the wealthiest households in the country.
As I wrote in USA Today:
Kristi Noem is now at the center of the national debate over estate tax repeal and her personal story is regularly repeated as an example of how the estate tax hurts family farmers and ranchers. But things have changed a lot since 1994 when the amount of wealth exempted by the tax was $600,000 for an individual. The wealth exemption is now $5.5 million per person and $11 million per family. Closely held businesses and farms have 14 years to pay the tax at low interest.
The number of farmers subject to the estate tax has been dramatically reduced as have the total number of estates. South Dakota is the state with the fewest taxable estates in the entire country, roughly 15 estates per year.
Losing one’s father and a family breadwinner is a traumatic event. But 23 years later, this story is still being used to justify the elimination a tax that is now exclusively paid by multi-millionaires and billionaires. Only two out of the wealthiest 1,000 estates are subject to the tax.
Doubling the estate tax exemption will cost an estimated $83 billion over the next decade while abolishing the estate tax will cost over $260 billion over the same period
Before she leads the GOP crusade to abolish the estate tax, Kristi Noem has some accounting of her own to do.