Copyright 2000 The Baltimore Sun Company
THE
BALTIMORE SUN
September 8, 2000, Friday ,FINAL
SECTION: TELEGRAPH ,1A
LENGTH: 899 words
HEADLINE:
House upholds estate tax veto
13 Democrats switch votes, defeat GOP on
'death tax' repeal
BYLINE: Karen
Hosler
SOURCE: SUN NATIONAL STAFF
BODY:
WASHINGTON - House Democrats closed ranks
yesterday to sustain President Clinton's veto of legislation that would have
eliminated the federal estate tax, contending that the Republican bill would
help the very richest Americans at the expense of the middle class.
Under pressure from the White House and their own leaders, 13 Democrats
who had supported the bill in June when it passed the House switched sides
yesterday to deny Republicans the two-thirds majority they needed to override
the veto.
Seven Democrats who were absent for the earlier vote also
contributed to the 274- 157 tally - 14 votes short of the two-thirds margin.
Democrats said the measure would benefit only the 2 percent of estates
large enough to owe federal taxes.
"I made my point that I wanted the
Democrats to get serious about middle-class tax relief," said Rep. Albert R.
Wynn of Prince George's County, who was among the Democratic vote-switchers. "I
think we need to do something to help small businesses and family farms.
"But we don't have to go as far as the Republicans did to help people
like Bill Gates."
The three other Maryland Democrats also voted to
sustain the veto; all four Maryland Republicans voted to override.
Clinton applauded the tally, calling the bill "a huge tax cut for the
most well-off Americans" whose high cost would imperil the nation's economic
prosperity and crucial government programs.
Republican supporters of the
bill had argued that the estate tax - which they term the "death tax" - forces
millions of middle-class business owners and farmers to pay huge sums for
insurance to protect heirs from estate taxes.
In other cases, they
contended, the heirs have to sell the farms or businesses to pay the taxes.
Proponents of the repeal also argued that the very richest Americans are
able to avoid the tax by setting up trusts and foundations, so the real burden
falls on ordinary Americans.
"The death tax has given purgatory a new
meaning," said Rep. Bill Archer of Texas, chairman of the House Ways and Means
Committee. "Death as an event should not trigger a tax."
Republicans
said they were unwilling to compromise by moving toward a Democratic alternative
that would eliminate the tax on estates worth up to $4 million
but would continue to tax the wealthiest 1 percent of estates.
They
prefer instead to make total repeal of the estate tax an issue in the fall
elections.
"It helps us build the case for the campaign," House Majority
Whip Tom DeLay of Texas said of yesterday's vote. "The American people are going
to see that the Democrats want to keep the money in Washington; they don't want
to give it back."
Democrats argued that it was a question of whether
repealing the estate tax, at a cost of $105 billion over the
first 10 years, was the best use of a budget surplus that might not be as large
as projected.
"We still have a $5.6 trillion national
debt," said Rep. Charles W. Stenholm, a Texas Democrat who suggested that the
money would be better put toward paring down the debt and shoring up the Social
Security and Medicare programs.
"I don't want to leave behind a massive
national debt because we want to do the politically popular thing in the year
2000," he said.
Propelled by heavy lobbying on behalf of the
small-business community, the notion of repealing the estate tax picked up
powerful election year momentum in Congress this spring - even though 98 percent
of estates owe no federal tax.
Under current law, an estate can pass
tax-free to a spouse, and estates valued at up to $675,000 are
exempt from federal taxation. The tax free level is scheduled to rise to
$1 million in 2006. Farms and family businesses now receive a
$1.3 million exemption.
Most of the tax burden is
carried by fewer than 3,000 estates, worth more than $5 million
each, that pay marginal rates ranging up to 55 percent. The vetoed bill would
have taken 10 years to completely eliminate the estate tax. Relief would have
gone first to those paying at the highest rate.
Rep. Sam Farr of
California, another of the 13 Democrats who voted for the bill in June but
switched to back Clinton's veto this time, chastised the Republicans for
refusing to compromise.
"I voted for your bill because I thought you
would lead us into a meaningful discussion of estate tax reform, but you were
more interested in a political message," Farr said. "Shame on you."
For
the National Association of Independent Businesses, the powerful small-business
lobby that has made repeal of the estate tax its top priority, this is no time
for compromise.
Flushed by its success in at least pushing the measure
close to enactment, the organization is mobilizing its 600,000 members for the
November elections to try to ensure total victory next year.
"Four years
ago, nobody was even talking about this issue," said Jim Hirni, a lobbyist for
the association. Now, he said, surveys suggest that most Americans support the
idea of total repeal.
Instead of trying to negotiate a compromise with
Clinton, Hirni said, his members will be encouraged to work against the
re-election of Democrats who opposed the bill yesterday, as well as against Vice
President Al Gore, the Democratic presidential nominee.
"We just need to
carry the momentum we've got into the election and keep it going next year,"
Hirni said.
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