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Friday, June 9, 2000

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Hoekstra supports bipartisan House vote to eliminate Death Tax

Repeal of inheritance tax will help family farmers, small business owners, Hoekstra says

WASHINGTON – Congressman Pete Hoekstra joined with a bipartisan majority of House of Representatives members Friday in voting to repeal the 84-year-old estate or inheritance tax, also known as the Death Tax, which can cost up to 55 percent of the value of a family business or farm.

House members voted 279-136 to approve the bill, which now moves to the U.S. Senate for consideration. A total of 213 Republicans, 65 Democrats and one independent supported the bill. The legislation is essentially the same as language included in the Taxpayer Refund and Relief Act of 1999, which the House and Senate approved last year and was vetoed by President Bill Clinton.

"No one should be forced to visit the undertaker and the tax collector at the same time," said Hoekstra, R-Holland. "The Death Tax is inherently unfair because it taxes assets that were already subject to taxes once. It causes undue burdens on family farmers and small business owners and their heirs, who often must sell off their inherited assets simply to pay their taxes."

Hoekstra noted that the National Federation of Independent Businesses reported statistics that indicate that more than 70 percent of small businesses do not survive to the second generation and 87 percent do not make it to the third generation. The NFIB indicated that 60 percent of small-business owners report that they would create new jobs in the coming year if estate taxes were eliminated. NFIB added that about one-third of small businesses owners today will have to sell outright or liquidate part of their businesses to pay death taxes. Half of those who must liquidate will have to eliminate 30 or more jobs in each case, NFIB said.

The American Farm Bureau, Hoekstra added, reported that 99 percent of U.S. farms are owned by individuals, family partnerships or family corporations and that about half of farm and ranch operators are 55 years old or older, nearing the time when it will become necessary to transfer their farms or ranches to their children.

The legislation approved by the House will phase out the federal estate, gift and generation-skipping tax over the next 10 years, Hoekstra said, while also simplifying the tax during the phase out period. The Death Tax was originally implemented in 1916.

"The Death Tax represents an insidious form of double taxation," Hoekstra said. "The repeal of this unfair tax is long overdue."

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