Wednesday, February 16, 2005

Thune: D.C. tax break shows Daschle out of touch

Argus Leader
October 21, 2004 Thursday
Thune: D.C. tax break shows Daschle out of touch

by Jon Walker, Staff

Republican candidate John Thune said Wednesday that Democratic Sen. Tom Daschle's participation in a tax break on housing in Washington, D.C., shows that his opponent has lost touch with South Dakota.

"It ties in to the very theme of the campaign all along," Thune said in a phone interview from Garretson. "Tom Daschle is a lot more about Washington than he is about South Dakota. He's willing to declare Washington his principal place of residence for a $288 tax break."

Daschle said Thune is drawing a false conclusion.

"This is just another personal attack that has no basis in fact," Daschle said in an interview from Huron. "I'm not surprised once again that John would spend his time attacking me rather than talking about what he'd like to do for South Dakota."

Their dispute centers on what is called a "homestead deduction" for the $1.9 million home Daschle and his wife, Linda, bought in spring 2003. It became an issue within the past week as the two campaigns provided paperwork and conflicting accounts on the Daschles' application for the deduction. The discussion concerns not whether Sen. Daschle technically qualifies for his seat in Congress but what, if anything, the tax break implies politically.

D.C. offers deduction

The local government of Washington, D.C., offers the deduction to residents who own a home and pay the city's income tax. Members of Congress are exempt from the local income tax but are eligible for the deduction if their spouses do pay it. That is the case with the Daschles, because Linda pays the local tax on her earnings as a Washington lobbyist.

Records supplied by the Thune campaign show that Sen. Daschle signed an application for the homestead deduction on April 28, 2003. An attached list of rules from the district tax office says the property in question must be the "principal residence" of the applicant. The Daschles' tax bill, also attached, shows an assessment of $1,445,830, a total tax due for the year at $12,397 and a $288 homestead deduction.

Thune said his campaign got the information last week from Talon News, a self-described conservative organization that used the Freedom of Information Act to acquire the records on Daschle.

The application signed by Daschle includes no indication that the senator was declaring Washington to be his primary residence. The application says "only one owner must sign" but does not state the spouse paying local income tax must be the one who signs.

Thune said, however, the signature was the key.

"His staff insisted that it was Linda that signed it," Thune said referring to a story on the Daschles that Roll Call printed in August 2003.

When copies of records acquired by the FOIA arrived last week showing Sen. Daschle's signature on the original application, that made the application an issue, Thune said.

"Either one could have signed it, but he signed it," Thune said. "To me it suggests he sees himself as a D.C. resident and declares that South Dakota is not his principal residence. You can only have one principal place of residence."

The Roll Call article in question quotes a Daschle campaign staff member saying Linda Daschle's status made the couple eligible for the tax break but does not say she signed the application.

Additionally, the Daschle campaign supplied records Wednesday, dated Aug. 14, 2003, showing that a box indicating "principal place of residence" was checked "yes," but it was part of a revised and updated application signed by Linda Daschle, not the senator.

Daschle said Wednesday night that he signed "typical closing papers" on the house in April 2003, including the homestead deduction application.

"Only one signature is required for all the closing papers. This was in those papers. They provided Linda with the new form, and she signed it. They've eliminated the form I signed. Now on record is Linda's signature."

Thune said his comments on Daschle's primary residence were not to suggest Daschle was ineligible to vote in South Dakota or represent the state in the Senate. "I'm not going there," he said.

Chris Nelson, South Dakota's secretary of state, said he had gotten about 20 calls in recent days from people questioning Daschle's primary residence.

Nelson said a U.S. senator must be a citizen for at least nine years, must be at least 30 years old and must be an inhabitant of the state at the time of election. Daschle filed a notarized application of candidacy on Jan. 10, signing it under oath.

"I don't have a concern he's met the requirements that we have to be a candidate," Nelson said. "If anybody's got an issue with that, they're going to need to go talk to the U.S. Senate."

In effect 'last 20 years'

Donald Ritchie, associate historian of the Senate Historical Office, said the Senate Rules Committee often hears protests about members' eligibility. But he also said numerous members of Congress of both parties claim the homestead deduction, which was introduced to encourage residents to stay in the city rather than move to Maryland and Virginia suburbs.

"It's been in effect probably the last 20 years," Ritchie said. "The D.C. government started it sometime in the 1980s to encourage people to move to the city."

Asked if anything would come of a protest based on the homestead deduction, Ritchie said, "Nothing is inconceivable in Washington, but it would be improbable."

Daschle discounted the whole discussion of his residence.

"That's silly," he said. "I love my home in Aberdeen. South Dakota is our principal residence, and I'm very proud of the fact that I own the home I grew up in. Linda and I own it. We pay taxes on it and keep it up, and my mother lives there."

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