Fossella Vows to Fight for Override of
Clinton's Veto of Death Tax Repeal

Fossella Hopeful Veto Override Will End Tax on Families & Small Business Owners

Staten Island, NY -- Congressman Vito Fossella (R-NY13) today expressed disappointment over the Administration veto of legislation to repeal the death tax, but vowed he will vote to override the veto as early as next week.

"The Administration's veto of this bill will hurt small business men and women across the country," Fossella said. "It is unfortunate that, despite the bill receiving overwhelming bipartisan support, the President was unwilling to do what is right for small business owners. Repealing the death tax is a reasonable and common sense measure aimed at helping families save more of their money. That is why more than a quarter of Democrats in Congress voted to abolish this unfair tax. They recognize that repealing the death tax will benefit hard-working families. The time has long since passed for the American people to be subjected to one last tax upon their death."

Congress is expected to vote to override today's veto of the "Death Tax Elimination Act" (H.R. 8) after returning from the August district work period. The bill, with 65 Democrats voting in favor, passed in June. It would repeal the estate, gift and generation skipping transfer tax within 10 years. According to the National Federation of Independent Businesses (NFIB), more than 70 percent of small businesses do not survive the second generation and 87 percent do not make it to the third generation. Sixty percent of small-business owners report that they would create new jobs over the coming year if estate taxes were eliminated.

"With a non-Social Security budget surplus expected to top nearly $900 billion, we have an unprecedented opportunity to reduce taxes and still make investments in critical areas," Fossella said. "We can repeal both the marriage penalty and death taxes, protect and strengthen Social Security and Medicare and pass a prescription drug coverage plan for seniors. I believe that repealing these taxes could substantially increase economic growth, boost tax revenues, encourage capital formation and spur job production."

The death tax ranges between 38% and 55%. Despite arguments by the Administration calling the tax cut too costly, the death tax produced less than 1% of total federal revenues in Fiscal Year 1996. In 1987, current Treasury Secretary Lawrence Summers wrote, "Intergenerational transfers account for the vast majority of aggregate U.S. capital formation. Because of its many exemptions and tax avoidance schemes that are legally permissible, the [death] tax raises only a small amount of revenue."

A recent survey suggested that repealing the death tax would expand the nation's output by $77 billion, create more than one million new jobs and increase personal income by $56 billion over seven years.