BILL TO KILL DEATH TAX INTRODUCED

By: Todd Shields Family-Owned Newspapers Support Move


WASHINGTON - Congress last week began turning its attention to the federal
estate tax, and a fault line quickly emerged, with Democrats saying they want to
amend the levy and Republicans saying they want it eliminated. Which side
prevails could be determined by the larger debate over the size of the Bush
administration's proposed tax cut.

In the House, Rep. Jennifer Dunn, R-Wash., and Henry Tanner, D-Tenn., on
Wednesday introduced a measure similar to their estate-tax repeal bill of last
year, which passed both houses of Congress last year, but died with a
presidential veto.

Speaker of the House Dennis Hastert, R-Ill., predicted the measure would easily
pass the Republican-dominated House. Its fate is less clear in the evenly
divided Senate. There, some Democrats say President Bush's proposed $1.6-
trillion tax cut, which includes estate-tax repeal, is so large it could gut
important government programs.

On Thursday, small-business owners appeared before the Senate Finance
Committee's taxation subcommittee. They were joined by lawyer William H. Gates
Sr., who argued the tax is a just price to pay for the opportunity U.S.
citizenship affords.

But most witnesses said the estate tax is too costly. Oklahoma grocer Thomas
Goodner called it "one of the biggest threats to our future viability and growth
as a family-owned business." Such arguments echo those made by newspaper
publishers, who say the estate tax threatens the dwindling number of family-
owned newspapers, since heirs may need to sell to meet tax bills as high as 55%
of an estate. The levy now affects estates worth more than $675,000, an
exemption level set to rise to $1 million by 2006. Sen. Kent Conrad, D-N.D., a
leader on tax issues among the chamber's Democrats, proposed increasing the
exemption level to $10 million for a farm or business.

Newspapers typically are worth far more than Conrad's proposed level, and the
proposal excited no enthusiasm among industry observers. "We need relief for all
family businesses. You shouldn't be setting some arbitrary line," said Paul
Boyle, vice president for government affairs for the Newspaper Association of
America, which represents more than 2,000 newspapers. The association backs
repeal of the tax.



Todd Shields (tshields@editorandpublisher.com) is the Washington editor for E&P.



Copyright 2001, Editor & Publisher.