Berkley, Gibbons unite to vote to repeal inheritance taxes

Friday, June 9, 2000 | 3:23 a.m.

Supporters said they were acting to prevent taxes from ruining family farms and small businesses, but detractors decried it as a costly giveaway to the wealthiest Americans.

Rep. Jim Gibbons, R-Nev., said it would put a stop to taxpayers having to "visit the funeral home and the IRS on the same day."

Berkley, a freshman anticipating a hard-fought battle for re-election, was among 65 Democrats and one independent who helped Republicans pass the measure to the Senate, 279-136.

"Lifting this burden from the backs of southern Nevada businesses and individuals will free up hundreds of thousands of dollars in our region every year," Berkley said.

"Not only will this help drive the economy in the Las Vegas Valley, but this will reduce the harmful effects of runaway development and the instability of our communities," she said.

Clinton promised to veto the bill, citing revenue losses of $750 billion in the decade after repeal is fully in place and calling it a "windfall" for the rich. "If this bill were presented to me in its current form, I would veto it without hesitation," he said in a statement Friday.

Berkley said when she first ran for Congress she targeted three taxes she was determined to change - the marriage penalty, child-care tax credit and the inheritance or so-called "death taxes."

"I've voted to eliminate the marriage penalty. I've cosponsored an increase in the child-care tax credit. And today we've finally passed the complete elimination of the death tax," she said.

Gibbons said the "death tax has a stranglehold on Nevada's families." He said it was enacted in 1916 in an attempt to break-up and redistribute a concentration of the nation's wealth.

"We all have experienced the loss of a loved one. It is a time when families come together. And unfortunately, it is also a time when the tax collector comes knocking," Gibbons said.

"Nevadans should not have to visit the funeral home and the IRS on the same day," he said.

Clinton said he would sign a less costly Democratic alternative geared toward the handful of farms and small businesses that are hurt most by the estate tax.

But supporters of full repeal brushed aside that alternative and ignored Clinton's veto threat.

The bill, which would cost $105 billion during the 10-year phaseout, would cut the top 55 percent rate in 2001 and gradually reduce all other rates over the next few years, with full repeal coming in 2010.

Only about 2 percent of families of people who die pay the estate tax, which applies this year to estates above $675,000 for an individual. In 1997, about 43,000 estates out of 2.3 million adult deaths were taxable. Because of more generous exemptions, only a tiny fraction of farm and small business heirs are affected.

But sponsors said the threat of the tax forces people to do costly estate planning, restrains expansion and investment and jeopardizes jobs.