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Debate Heats Up Over Controversial Inheritance Tax RepealAired June 8, 2000 - 2:18 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU WATERS, CNN ANCHOR: On Capitol Hill today, lawmakers are gearing up for some heated debate over estate taxes. The House is set to vote on a plan that would repeal the inheritance tax over 10 years.
This story is getting some special attention from CNN congressional correspondent Chris Black, who joins us now from Capitol Hill -- Chris.
CHRIS BLACK, CNN CONGRESSIONAL CORRESPONDENT: Lou, Republicans have made repeal of the so-called death tax, the estate and gift taxes paid by people who inherit property an election year priority. And they are focusing the most attention on small business owners and family farms.
A case in point is the case of Gene Mullinix, the owner and proprietor of a farm in Lisbon, Maryland. This farm has been in the Mullinix family for more than 100 years, since the Civil War, for seven generations. And Mr. Mullinix wants to pass it on to his children, but he says he's afraid that they will have to sell the land in order to pay the inheritance tax.
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GENE MULLINIX, R.H. MULLINIX & SON CO.: Every time someone passed away, they had to sell some of the real estate to pay the taxes. And it's still true today that when someone passes away, in order to maintain that farm, something's got to be sold.
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BLACK: Federal law exempts estates worth up to $1.3 million -- $2.6 million for couples. But people like Mr. Mullinix and small business owners have a special problem, say supporters this tax repeal, because their assets are often worth a lot more on paper than the bank accounts of their heirs. The land, for example, that the Mullinix farm is located on is worth a lot of money to developers. And small businesses frequently have to invest a lot of money in capital improvement and equipment just to do their job.
President Clinton is threatening to veto this. He says that it would be a windfall for the wealthiest taxpayers in the United States. And he's concerned that people with estates worth hundreds of millions of dollars will get off scot free. And this will cost the treasury $50 billion a year when it is fully implemented. So Democrats are proposing a compromise. Their compromise would cut the tax for everyone by one fifth and increase the exemption for small businesses and for small failing family farms up to four million dollars. But the Republicans do control the House of Representatives, so when it reaches the floor tomorrow, it expected to pass easily. Prospects however in the Senate are a lot less clear because Democrats are saying they're going to insist on a vote on their compromise -- Lou.
WATERS: All right, Chris Black, up on Capitol Hill today.
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