Copyright 2000 The Houston Chronicle Publishing Company
The Houston Chronicle
September 01, 2000, Friday 3 STAR EDITION
SECTION: A; Pg. 1
LENGTH:
851 words
HEADLINE: Estate tax repeal
gets Clinton veto;
Republicans vow to override action
SOURCE: Staff
BYLINE: DAVID
IVANOVICH, PATTY REINERT, Houston Chronicle Washington Bureau
DATELINE: WASHINGTON
BODY:
WASHINGTON - President Clinton vetoed a Republican-backed bill Thursday that
would have repealed the federal estate tax, saying it was fiscally irresponsible
and unfair to the 98 percent of Americans who would be left out.
"This
bill is wrong," Clinton said during a ceremony in the East Room of the White
House. "It shows the sense of priorities that I believe got us in trouble in the
first place in the 1980s, and that if we go back to those priorities, will get
us in trouble again."
Republicans immediately vowed to override the
veto, scheduling a vote for next Thursday. But Democratic leaders said they are
confident they can block the override, even though 65 of their colleagues sided
with Republicans to push the bill through the House earlier this summer.
The bill would get rid of estate, gift and generation-skipping transfer
taxes by 2010 and use $ 105 billion from the projected budget surplus to make up
the difference. It would cost an additional $ 750 billion for the second decade
of tax relief.
Clinton warned that cost would prevent the federal
government from paying down the debt and investing in education, health care,
the environment and other priorities. He also said the bill failed the "fairness
test" because it would provide tax relief to only 2 percent of the most wealthy
Americans.
More than half of the benefit would go to just 3,000
families, who would receive an average $ 7 million tax break each, while poor
and middle-income families would get no additional tax break.
Still, the
issue has resonated strongly with voters in this election year as Republicans
insist their plan is aimed at giving tax relief to farmers and small business
owners, some of whom struggle to pay the taxes and keep afloat when their
parents die. A Montana rancher on a red tractor drove to the White House last
week to deliver the bill to Clinton.
On Thursday, the president vetoed
it after inviting a South Dakota family farmer and a wealthy self-made
businessman from New York to speak in favor of the veto.
"Over half the
benefit of that bill that came down here on a tractor goes to 3,000 people,"
Clinton said, "and I'll bet you not a single one of them ever drove a tractor.
I'll bet you if I had a tractor-driving contest with any of those 3,000 people,
I would win."
The current tax code already exempts the first $ 670,000
for most estates and $ 1.3 million for family-owned farms, ranches and small
businesses. By 2006, most families will be able to pass on their estates worth
up to $ 1 million tax-free.
Two Democratic bills pending before Congress
would increase the exemption for family farms and closely held businesses to $ 2
million and allow any portion of that exemption not used when the first spouse
dies to be added to the estate of the surviving spouse.
That way,
families could inherit up to $ 4 million tax-free. The Democratic plans provide
immediate relief, while the GOP plan would be phased in over 10 years.
House Minority Leader Richard Gephardt, D-Mo., praised Clinton's veto of
the Republican bill, which he called a "windfall for the wealthy" and
"reckless."
But Senate Majority Leader Trent Lott, R-Miss., and House
Majority Whip Tom DeLay, R-Sugar Land, promised to push forward to override the
veto.
"Apparently, even death can't protect you from the Clinton-Gore
administration's insatiable desire for higher taxes," Lott said.
Rep.
Kevin Brady, R-The Woodlands, also criticized Clinton and Vice President Al
Gore.
"The president today said he wants some sort of estate tax relief,
but in the eight years he's been in office, he has never worked to provide
meaningful, fair estate tax relief," he said.
"This choice is clear,"
said Rep. Bill Archer, R-Houston. "Al Gore and the Democrats will continue the
death tax, and Governor Bush and the Republicans will end it."
Republican presidential nominee George W. Bush threw his support behind
repealing the estate tax during his acceptance speech at the GOP convention,
earning a huge round of applause from delegates, one in five of whom were
millionaires.
On the campaign trail in Toledo, Ohio, Thursday, Bush
criticized Clinton's veto.
"Our plans only help the wealthy, they
(Democrats) claim. It's class warfare," said Bush, insisting he wanted to reduce
taxes for middle- and low-income "hard-working Americans."
Frank Luntz,
a Republican pollster who has surveyed voters on the issue for several years,
said most Americans know they won't be affected by estate taxes but they oppose
them anyway because "it sounds like a stupid tax."
Luntz said his polls
suggest 70 percent of voters favor eliminating the tax.
The issue does
not appeal just to Republicans. A poll of independent voters taken by Zogby
International suggests they would overwhelmingly support a candidate who favors
repealing the tax over one who supports a high tax rate on large estates.
The poor tend to be most opposed to repealing the tax, Luntz said.
"Everybody else hopes to be sufficiently successful that they will have
to pay the tax, which they don't want to pay," he said.
GRAPHIC: Photo: President Clinton
invited South Dakota farmer John Sumption, left, to Washington on Thursday to
endorse his veto of a bill to repeal the federal estate tax. Republicans vowed
to override the veto (p. 17); Associated Press
NOTES:
Chronicle reporter David Ivanovich contributed to this story.
LOAD-DATE: November 21, 2000 
