By: Joe Strupp
Legislation to dump the federal estate tax ? a hindrance to family-owned businesses, including newspapers, for years ? received approval July 14 from a key U.S. House of Representatives committee, setting the stage for a full floor vote later this month.
While supporters cheered the approval as a positive step toward repealing the 83-year-old tax, they admit the bill has a long way to go in Congress, where more popular tax cuts are up for passage. President Clinton also has vowed to veto the proposal.
Still, the recent vote by the House Ways and Means Committee to approve $864 billion in tax cuts over 10 years, including a phase-out of the estate tax, gives hope to the proposal’s backers.
“Americans work hard all their [lives] building a family business,” says Rep. Jennifer Dunn, R-Wash., who sponsored the bill with Rep. John Tanner, D-Tenn. “But when they die, the federal government can take more than half of all their savings.”
The proposed repeal of the estate tax, also known as the death tax, would reduce the burden incrementally beginning in 2001 until it is repealed by 2009. Right now, the death tax is levied on inheritances at rates ranging from 18% to 55%, with an exemption for the first $625,000.
Dunn spokeswoman Kara Kennedy says committee approval is only the first step toward a repeal, which would eventually need full House and Senate support, and the signature of a reluctant Clinton.
“The president has put up threats, but we won’t know what happens with him until we see it,” Kennedy says. Currently, the proposal has 222 co-sponsors in the House.
Begun in 1916 to raise money for World War I needs, the death tax has been a longtime thorn in the side of family newspaper owners, many of whom have been forced to sell rather than pass on the family business to heirs who would be forced to pay the tax.
Several family-owned newspaper publishers ? led by Frank Blethen, publisher of The Seattle Times, and the Newspaper Association of America ? have spent years lobbying for the repeal, stepping up their efforts in recent months.
The group also has a Web site at http://www.deathtax.com, which urges citizens to lobby for a repeal.
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