A. L. (Butch) Alford, Jr. Lewiston Morning Tribune Lewiston, ID	Alton F. Baker III The Register-Guard Eugene, OR	Chris Bennett The Medium Seattle, WA
Jerry Brady Post Register Idaho Falls, ID	Scott Campbell The Columbian Vancouver, WA	Chuck Cochrane Yakima Herald-Republic Yakima, WA
Wm. Stacey Cowles The Spokesman-Review Spokane, WA	Nancy L. Freeman Kodiak Daily Mirror Kodiak, AK	Deborah Frol Walla Walla UB Walla Walla, WA
Stephen Hartgen The Times-News Twin Falls, ID	Peter Hovitz Eastside Journal Bellevue, WA	David Lord Pioneer Newspapers Seattle, WA
Elizabeth McCool The Bulletin Bend, OR	Ted Natt The Daily News Longview, WA	Thad Poulson Daily Sitka Sentinel Sitka, AK
Ronald Stewart The News-Review Roseburg, OR	Dwight Tracy Herald and News Klamath Falls, OR	Dennis Waller The Chronicle Centralia, WA
Lew Williams, III Ketchikan Daily News Ketchikan, AK	L. Stedem Wood Skagit Valley Herald Mt. Vernon, WA	Rufus Woods The Wenatchee World Wenatchee, WA

cc:

Evonne Agnello Pacific Northwest Newspaper Association	Diana Kramer Washington Newspaper Publishers Association	Virginia Moorehouse The Bakersfield Californian Bakersfield, CA
Rowland Thompson Allied Daily Newspapers of Washington	Alexis Scott Reeves Atlanta Daily World Atlanta, GA	Dorthy Leavell Chicago Crusader Chicago, IL

Death Tax Newsletter

This bi-monthly newsletter is produced by the Seattle Times for family owned newspapers. Please share it with other family businesses in other industries. Any suggestions for distribution or content will be greatly appreciated.

EXPECTED OUTCOME – PRESIDENT VETOES TAX BILL

As expected, President Clinton vetoed the tax bill passed by Congress, which would have resulted in the phasing out of the death tax over a nine-year period. It is currently unclear whether any substantive tax legislation will be addressed this year.


DEATH TAX REFORM STILL ALIVE

However, there is currently an effort underway to include some portion of the death tax legislation, together with other tax incentives, to the minimum wage package now being discussed in Congress. The premise is that small businesses bear the brunt of a minimum wage increase and therefore Congress ought to provide some offsets for those same businesses that would minimize the economic affects of the increase in the minimum wage. Many Republican congressional members are unwilling to consider the increase in the minimum wage unless the tax benefits are a part of the package.

The detail of the proposed death tax reduction is essentially the first five years of H.R.8, which would provide for a 5% reduction in the top rate in the first year, and a reduction of 1% annually over the following three years, resulting in a top rate of 47%. Additionally, the provision would make the unified credit a true exemption, resulting in the tax rate beginning at 18% after the applicable exemption, rather than at the current 37% rate.

At present, there are no reports of the Senate having a similar approach. As a result, it is unclear whether this modified reduction in the death tax will be a part of any minimum wage package presented to the President. It is also unclear how the administration will respond to a minimum wage package that provides tax benefits to business.


ACTION REQUIRED

While the death tax reduction likely to be included in this minimum wage package is small, it is certainly a step in the right direction. Repeal is still the goal, and our efforts must be clearly focussed on that goal. Nevertheless, it is useful for Congress to hear from those who are most affected by this confiscatory tax. The message ought to be one of support, urging Congress to take a step in the right direction. In addition, Members need to hear that this is only the first step, that repeal is necessary in order to prevent the liquidation of local, community-based businesses. The attached editorial from Editor and Publisher is a timely reminder that the publishing industry continues to be affected. Consider forwarding it to your Representative and Senators.


SUCCESS IS POSSIBLE

The passage this year of phased-out repeal of the death tax by both the House and the Senate is a remarkable victory, and it proves that elimination of this tax is possible. Political experts say that Congress’ passage of legislation, even if not signed by the President, establishes a precedent, making it all the easier to pass it again, until the political timing makes it possible to be signed into law. It is critical that family held businesses continue to keep this issue in front of political leaders and the public until repeal is achieved.

Web site - www.deathtax.com

Did You Know?

The death tax brings in less than 1.1 percent of total federal revenues.

And, it is estimated it costs the government 65 cents of every dollar raised for enforcement and compliance.

The death tax is a jobs issue.

Repeal of the tax would result in 145,000 new jobs over the first 9 years of repeal.

And that doesn’t include the countless jobs that would be saved if the death tax didn’t force 70% of family and small businesses to liquidate or sell out after only one generation.

99% of all private businesses have fewer than 500 employees. This represents 50% of all private sector jobs which generate 50% of all revenue.

77% of the American voters polled by the 60 Plus Association indicated that they would be "more likely" to vote for their member of Congress if he or she voted to eliminate the death tax.