- The Washington Times - Friday, September 1, 2000

President Clinton yesterday vetoed legislation that would have repealed the federal tax on estates over the next decade, setting the stage for a veto-override battle in Congress next week.
"This estate-tax bill is part of a series of actions and commitments that, when you add it all up, would take us back to the bad old days of deficits, high interest rates and having no money to invest in our common future," Mr. Clinton said at a White House ceremony.
The legislation would have saved the 2 percent of estates that owe taxes about $105 billion over the next decade. When in full effect after 2009, the bill would have provided about $75 billion in tax savings to the 54,000 estates that owe taxes each year, according to the White House.
At a campaign stop yesterday, Texas Gov. George W. Bush said he would have signed the bill, calling Democratic arguments against it "class warfare."
While the Clinton administration argues that few have to pay the tax that reaches 55 percent, sponsors of the repeal say the "death tax" inhibits business expansion, threatens breakups of farms and forces millions of taxpayers to pay lawyers, accountants and insurance companies so they can avoid the tax.
"President Clinton has just given the back of his hand to working families who want to leave their hard-earned family farm, small business, or Internet start-up to their children after they die," said Senate Majority Leader Trent Lott, Mississippi Republican.
Said Rep. Jennifer Dunn, Washington Republican: "Working men and women across the country recognize that it is simply wrong that after paying taxes your whole life, the government can collect up to 55 percent of these same assets when the head of the family dies. This is a fairness issue."
And House Ways and Means Committee Chairman Bill Archer, Texas Republican, said the president had denied tax relief to millions of Americans.
"It's not right that just as a small business owner or family farmer draws their last breath, the IRS is drawing up their last tax bill," Mr. Archer said.
Republicans next week will bring the bill back to the House and Senate to attempt to override the veto. The measure passed with a veto-proof 279-136 margin in June in the House, but was shy of the two-thirds needed to override a veto in the Senate, where it passed 59-39 in July.
With House Democratic leaders whipping their members to vote against the override, Republicans are not expected to succeed, but they will use the issue in both the presidential election and congressional campaigns.
Mr. Clinton said he does not object to lowering the estate tax, to "respond to the legitimate concerns of people who happen to be in upper-income levels," but "I don't think this is a fiscally responsible bill, and I don't think it is a fair bill and, therefore, I vetoed it."
North Dakota farmer John Sumption, who stood at Mr. Clinton's side during yesterday's ceremony, disagreed with the Republicans' assertions.
"Mr. President, I am not an expert on tax law, but I know about family [farmers]… . They are not worried about estate taxes because they don't have to pay them. They are worried about the prices [they] receive for their crops and livestock, and about public schools for our kids, and about paying for prescription drugs," Mr. Sumption said.
Rep. Charles B. Rangel, New York Democrat, said that if Republicans had really wanted to cut estate taxes "they would have negotiated with the president and Democrats… . Instead, they sent down a bill they knew would be vetoed and should have been vetoed."
Taxes are not due on the estates of individuals worth less than $675,000 and are not due on a married couple's estate, with some estate planning, worth less than $1.3 million.
Small businesses and family farms receive added breaks sheltering a total of $2.6 million in estate assets.
As a result, 98 percent of estates owe no taxes, and family-held farms or small businesses that pay estate taxes number in just the thousands each year.
But with taxes reaching a peak marginal rate of 55 percent on assets worth more than $3 million and a general sentiment against having death trigger a tax, the estate-tax repeal enjoys support from a majority of Americans.
Business groups also lobbied extensively for the estate-tax repeal.
The National Federation of Independent Businesses contends that one-third of small business owners will have to sell or liquidate a part of their firm to pay estate taxes.
The White House called those estimates outrageous.
While there are 25 million small businesses in the United States, "there were only about 1,000 small businesses in this country in 1998 that were subject to the estate tax," said White House spokesman Joe Lockhart.
But Tim Hammonds says that overlooks the exorbitant and wasteful costs family businesses incur for estate planning.
Mr. Hammonds, president and chief executive officer of the Food Marketing Institute, said "IRS data may show that a small percentage of family businesses pay estate taxes, but what these figures do not show is the many billions that businesses spent to avoid the tax."

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