Clinton Veto Brings Disappointment from Agriculture

September 1, 2000

President Clinton's veto of legislation that included abolishing the estate tax brought disappointment to the agriculture community. The National Cattlemens' Association said farms and ranches "could easily be wiped out" by the tax. American Farm Bureau Federation President Bob Stallman called it "a blow to hard working farmers and ranchers."

In his veto message, Clinton said the estate tax threshold was raised in 1997 for small business owners and farmers. "The typical American family today is paying a lower share of its income in federal income taxes than at any time during the last 35 years. That is a pretty good thing to be able to say, and yet we're healthy financially because we have proceeded in a balanced and disciplined way," he said.

"Now, I believe that this latest estate tax bill is another example where Congress comes up with something that sounds good ... But if you look at the merits, it basically would take us off the path that has brought us to this point over the last eight years. And I don't think we ought to be kicked off that path; I think we ought to think about how to accelerate our way down this road.

"I believe that this latest bill, this estate tax bill is part of a series of actions and commitments that, when you add it all up would take us back to the bad old days of deficits, high interest rates and having no money to invest in our common future."

NCBA said that when both houses of Congress passed the measure with bipartisan support, "they sent a clear message that estate taxes are costly and contribute to the demise of family businesses."

The tax burden on estates can reach up to 55% for estates worth $3 million or more. "This creates a quandary for cattlemen and women because their business is capital intensive. For example, a 500-head cattle ranch easily reaches a value of about $1.8 million when cattle, land and equipment are factored in. But that same estate generates a net income of only about

$50,000. Still, the ranch would be subject to about a $450,000 tax burden," said NCBA.

Stallman said farm and ranch families "deserve better . the all-out repeal of the death tax. The death tax is one that America. s farmers and ranchers should not have to live with."