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Thursday, September 7, 2000

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House fails to override Clinton veto of Death Tax repeal

Hoekstra disappointed in outcome; questions why at least 12 Democrats changed votes

WASHINGTON – Congressman Pete Hoekstra was disappointed Thursday as members of the U.S. House of Representatives Thursday failed to override President Clinton’s veto of a repeal of the federal estate tax, also known as the "Death Tax."

The House voted 274-157 to override Clinton’s veto of the Death Tax Elimination Act (H.R. 8), with 220 Republicans – including Hoekstra –53 Democrats and one independent favoring the override. A two-thirds majority (288 votes) was necessary to approve the override. House members originally approved the legislation on June 9 by a 279-136 vote – with 65 Democrats then supporting the measure – but Clinton vetoed the legislation in late August.

"No American should be forced to pay 55 percent of his or her savings, business or farm in taxes after they die," said Hoekstra, R-Holland. "President Clinton’s veto of this legislation is a slap in the face of every hard-working small business owner and farmer who are forced to worry about whether their children will be able to afford to inherit the businesses that they spent their lives to build."

The bill phases in a repeal of estate, gift, and generation-skipping taxes over a 10-year span. Additionally, the state death tax credit rates would be reduced in proportion to the federal estate and gift-tax rate reductions.

Hoekstra noted that the National Federation of Independent Businesses reported 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 because, in part, of hardships caused by estate taxes. 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 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 Death Tax is an onerous, outdated relic of the past that should be done away with," Hoekstra said. "I’m proud to be part of the effort to repeal it. The death tax should be buried once and for all and I will continue to work to see that that happens."

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