By
The Associated Press
WASHINGTON (AP) - Taking a bright red tractor yesterday through the capital's busy streets, Montana rancher Lynn Cornwell sought to dramatize the estate tax's impact on some farmers and businesses as he delivered a bill repealing the tax to the White House - where a certain veto awaits.
"The threat of having a tax like this takes away all incentive of growing your business," said Cornwell, a third-generation beef producer from Glasgow, Mont., who is president-elect of the National Cattlemen's Beef Association - a group that long has lobbied for repeal.
Republican congressional leaders brought in Cornwell, who rode on a tractor borrowed from a Virginia dealership, to increase public pressure on President Clinton to sign the bill, which he has vowed to veto, and set the stage for a September veto override vote in the House.
"This unfair tax is so steep that sometimes the deceased owner's children must break up a farm or sell a business just to cover the tax," said House Speaker Dennis Hastert, R-Ill., appearing at a farmers' market in Columbia, S.C. "Your children should not have to sell what you worked your whole lives to produce.'"
Despite the rhetoric, only about 2 percent of all Americans who die each year are forced to pay estate taxes, mainly because of a $675,000 individual exemption that a married couple can double with simple planning steps. The exemptions are even higher for farmers and small businesses, but many are still forced to buy costly insurance policies and pay lawyers and accountants to protect hard-earned assets from a tax that reaches 55 percent.
In Cornwell's state of Montana, for example, only about 5,000 estate tax returns are filed in a given year and only about 150 of them owe any tax, according to statistics from Sen. Max Baucus, D-Mont. But Cornwell, who runs a large 100-year-old ranch, said he spends about $15,000 a year for estate planning to escape the tax.
"We're trying to avoid as much estate tax as we can," he said.
The legislation, which passed the House and Senate earlier this summer with significant Democratic support, would gradually phase out the tax over 10 years at a cost of $105 billion. Clinton will have until just after Labor Day to sign or veto the bill, meaning GOP leaders could hold the House override vote the first week or two after Congress returns from its summer recess.
Many black and Hispanic Democrats - among them Tennessee Rep. Harold Ford, who gave the keynote address at the Democratic National Convention - were among the most prominent supporters, arguing that the tax threatened to undercut minority businesses that often take several family generations to build.
But White House officials left no doubt that Clinton would veto the bill, saying it primarily benefits the wealthy and would consume $750 billion of projected surpluses during the 10 years after the tax is fully repealed.
"He will veto it because we can provide more meaningful, targeted estate tax relief that provides immediate benefits to farmers and small businesses and doesn't give away the store," said Clinton spokesman Jake Siewert.
Democrats had offered less-costly alternatives backed by Clinton that would have reduced estate tax rates and increased exemptions for farmers and small businesses. Democratic presidential nominee Al Gore advocates a similar approach, while Republican candidate George W. Bush is calling for complete repeal.
Rep. Charles Rangel, D-N.Y., said one Democratic version would have offered an immediate $4 million exemption for family farms and small businesses, effectively eliminating the tax for all but the wealthiest estates.
"The Republican leaders aren't really interested in getting anything enacted that benefits the family farmer or small business owner," said Rangel, senior Democrat on the House Ways and Means Committee. "All they want is an excuse to hold more political stunts."
