Copyright 2000 Phoenix Newspapers, Inc.
THE ARIZONA
REPUBLIC
June 10, 2000 Saturday, Final Chaser
SECTION: FRONT; Pg. A1
LENGTH: 381 words
HEADLINE:
HOUSE SUPPORTS PHASEOUT OF ESTATE TAX OVER 10 YEARS
BYLINE: Republic news services
DATELINE: WASHINGTON
BODY:
The House voted overwhelmingly Friday to phase out the federal tax levied on
estates after a person dies, with 65 Democrats crossing party lines to vote for
one of the GOP's top legislative priorities.
The lopsided vote for the
tax cut was 279-136. Arizona Republicans J.D. Hayworth, Jim Kolbe, Matt Salmon,
John Shadegg and Bob Stump voted for the measure. Democrat Ed Pastor voted
against it.
Last-minute maneuvering by Democratic leaders hoping to ward
off the defections underscored the sudden potency of the issue, giving hope to
some lawmakers and lobbyists that a deal may be possible before the session
ends. President Clinton promised a veto of the GOP bill on the grounds it is
fiscally irresponsible. But, in a letter to House Speaker Dennis Hastert,
R-Ill., Clinton said he was committed to compromise.
The GOP-crafted
bill would gradually repeal the estate tax over the next decade, mostly by
cutting rates. Already, 98 percent of decedents avoid any taxes altogether
because the first $675,000 of an estate is exempt from taxation. Only 47,500
estates paid any estate tax in 1998, the most recent year figures are available;
but about half of the money raised by estate taxes was paid by the fewer than
3,000 estates worth more than $5 million.
The bill's slow phase-in helps
keeps its cost relatively low -- $105 billion over 10 years. When fully
implemented, federal tax revenues would decline an estimated $50 billion a year,
leading Clinton to decry it as giving "the largest estates a windfall."
But small business and farm groups have pushed hard for an
estate tax repeal, claiming the tax burden at death all too
often forces heirs to sell businesses and farms. That pitch helped gather
support from even some of the chamber's most liberal members, and Democrats
scrambled to come up with an alternative that fell short of a full repeal but
still would have almost halved the number of estates subject to the tax.
The Senate now must act on the measure, and so far this year, it has
proved to be the graveyard for a series of tax cuts approved by the House. But
the House vote gave the issue new momentum.
A Democratic alternative to
raise the exemption level for the tax to $1.1 million next year and cut rates by
20 percent was rejected, 222-196.
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June 11, 2000