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Small Business
Estate tax bill passes House
June 9, 2000: 4:18 p.m. ET

Business owners cheered by action that would eliminate inheritance taxes
By Staff Writer Hope Hamashige
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WASHINGTON (CNNfn) - Mark Sincavage seethed as he watched Friday's debate in the U.S. House of Representatives to eliminate the estate tax.

"The representatives kept saying this would help rich people, the richest 2 percent of the country, like Bill Gates," said Sincavage. "It's just not true. I am not Bill Gates."

Sincavage and other small business owners cheered the passage of the bill that will phase out inheritance taxes over the next 10 years. They say the estate tax, which starts around 35 percent and can go as high as 55 percent, is one of the main obstacles owners face in passing small businesses down from one generation of a family to the next.

Too costly for most small biz owners


In Sincavage's case, the estate tax he paid did not prevent him and two siblings from taking over their family's land development and commercial excavation business when their mother passed away in 1998. Sincavage admits he and his family did little preparation for the inevitable inheritance tax.

graphicWhen it hit, the bill to the federal government totaled $600,000 on assets of less than $3 million. Bills to attorneys, accountants and appraisers added $80,000 to their pain. Sincavage sold some of his Blakeslee, Pa., company's land to pay the first installment of the bill. Two years later, he is still liquidating assets to pay the government.

"We could have used that money and put it into the business," he said.

The bill's supporters said eliminating the death tax is a matter of fairness. People who have paid income tax and corporate taxes should not be taxed again simply because they die. Opponents stated the bill should be defeated because it would only benefit a handful of billionaires - the Bill Gates and Ted Turners of the world.

Victory for NFIB, small biz advocates


Those statements annoyed not only Mark Sincavage, but many of the members of the National Federation of Independent Business who, coincidentally, are at their annual meeting just steps from the U.S. Capitol. 

NFIB's position has always been that estate taxes inhibit the growth of small business and the group has been part of a coalition of lobbying groups working to end the estate tax.

NFIB spokesman Jim Weidman said the passage of death tax elimination legislation was great news for small business owners. It will help them when they try to pass their business to their heirs and in eliminating the onerous measures they have to take to ease the pain of estate tax payments.

Take for example NFIB member Brad Eiffert. Eiffert said he pays $36,000 a year for a life insurance policy for his father. The money he will collect on that should cover all or most of his inheritance taxes when his dad passes the lumberyard on to the next generation.

Eiffert believes the $3,000 he spends on the life insurance is a lot. But, according to the NFIB, he may actually be getting off easy. It is not unusual for some small businesses to pay upward of $100,000 each year in fees and services to attorneys, insurance companies and accountants just to prepare for their estate tax bills.

Presidential veto threatened


President Clinton sent a letter to House Speaker Dennis Hastert (R-Ill.) late Thursday promising to veto the bill, which would reduce estate taxes over 10 years at an estimated cost of $105 billion out of the projected federal surplus. The administration says the estimated cost of $50 billion a year to the federal government after the repeal is completed in 2010 would be untenable.

Clinton said he favors "targeted, fiscally responsible legislation to make the estate tax fairer, simpler, and more efficient," particularly in reducing its impact on some small businesses and family farms. The president argued in his letter that the Republican plan carries costs that will rise exponentially, risking the extended solvency of the Medicare and Social Security plans, and the country's ability to pay down the national debt, among other fiscal priorities.

In spite of Clinton's threat to veto the bill, 65 Democrats broke ranks and voted with the Republicans in favor of the legislation. And the bill's primary sponsor, Rep. Jennifer Dunn (R-Wash.) was thrilled with the outcome. A spokeswoman for the congresswoman said she was extremely happy that the bill passed with such broad bipartisan support. Back to top

  RELATED STORIES

Estate tax vote scheduled - June 5, 2000

  RELATED SITES

House passes estate tax repeal that could meet up with Clinton veto pen - June 9, 2000

National Federation of Independent Business

United States House of Representatives


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.