Copyright 2000 / Los Angeles Times
Los Angeles
Times
View Related Topics
July 14, 2000, Friday, Home Edition
SECTION: Part A; Part 1; Page 14; National Desk
LENGTH: 943 words
HEADLINE:
GOP SENATORS RUSH TO APPROVE REPEAL OF ESTATE TAX;
LEGISLATION:
MEASURE IS EXPECTED TO PASS TODAY, DESPITE A VETO THREAT BY CLINTON. THE HOUSE
HAS BACKED A SIMILAR BILL. LEVY IS SEEN AS A KEY ELECTION ISSUE.
BYLINE: RICHARD SIMON, TIMES STAFF WRITER
DATELINE: WASHINGTON
BODY:
The Republican-controlled Senate is expected to approve a phaseout of the
estate tax today, setting up a likely showdown with President Clinton and
stoking an election-year debate over how the federal budget surplus should be
used.
Senate GOP leaders appeared to have enough votes Thursday to win
passage of the measure after rejecting a Democratic alternative that would have
raised exemptions to the estate tax sharply but not ended it. The Democratic
proposal failed on a largely party-line vote, 53 to 46.
Clinton has
vowed to veto the bill repealing the tax, and Senate Democrats said that they
are confident they could sustain the veto. "This isn't going anywhere," said
Senate Minority Leader Tom Daschle (D-S.D.).
Republicans nonetheless
rushed toward approval of the bill to showcase the issue at the upcoming GOP
national convention and to use it against Democrats in the battle for control of
Congress and the White House.
Similar legislation was approved by the
House in June by slightly more than a two-thirds majority, the margin needed to
override a presidential veto.
The measure would cut the top 55% estate
tax rate in 2001 and then phase out all other rates by 2010. Currently,
individuals pay a sliding tax rate, beginning at 37%, on inheritances worth more
than $ 675,000, a figure that will rise to $ 1 million by 2006 under current
law.
Clinton says that eliminating the estate tax would benefit just 2%
of Americans. The administration also has estimated that the government would
lose $ 750 billion in revenue during the decade after full repeal took effect,
which Clinton argues is too much.
In a series of votes Thursday, the
Senate included in the estate tax bill a series of other tax-reduction measures.
Two proposals won almost unanimous support. They would:
* Repeal a 3%
excise tax on telephone service that was initially enacted to fund the
Spanish-American War more than 100 years ago.
* Permanently extend the
tax credit for research, an important measure to high-technology firms.
Both measures are supported by the Clinton administration.
By a
closer 58-41 vote, the Senate passed an amendment to repeal a 1993 tax increase
on the earnings of some Social Security beneficiaries.
Senators,
however, rejected a move to suspend the 18.4-cent federal gas tax for five
months, as well as an amendment to create a tax credit of as much as $ 12,000
for college tuition.
Immediately after the expected votes today on the
repeal of the estate tax, the Senate is scheduled to take up a $ 248-billion
bill to ease the so-called marriage penalty that forces some married couples to
pay more income tax than if they had filed as single taxpayers. That measure
also faces a threatened veto from Clinton, who contends that it provides too
large a share of the tax cut to couples who do not suffer from the penalty.
Procedurally, the Senate amendments to the House-approved estate
tax repeal bill would force the measure to go through another
legislative hoop: a House-Senate conference committee.
Critics of the
estate tax, called the "death tax" by many Republicans, complain that it has led
to the sale of family farms and small businesses and forced Americans to spend
thousands of dollars on estate planning.
"I thought government was
supposed to protect our property, not confiscate it, not penalize someone
because they've been successful," said Sen. Don Nickles (R-Okla.).
Republicans argued that, with projections showing the federal surplus
continued to grow, the government can afford to repeal the tax.
But
Democrats objected that the repeal would siphon off money needed for reducing
the national debt, shoring up Medicare and Social Security and funding other
critical needs, such as a Medicare prescription drug plan.
Clinton has
said that he is willing to consider an alternative similar to one offered by
Senate Democrats, which would raise the tax exemption for couples from $ 1.35
million to $ 2 million in 2001 and $ 4 million in 2010.
California
Democratic Sens. Dianne Feinstein and Barbara Boxer joined virtually all of
their party colleagues in supporting the measure. But the vast majority of
Senate Republicans voted against it, with only three breaking ranks--Sens.
Lincoln Chafee of Rhode Island, James M. Jeffords of Vermont and Arlen Specter
of Pennsylvania.
Critics of the estate tax say that most people regard
it as unfair, whether or not it would apply to them.
"What's happening
in Congress is the result of members going back to their districts and having
people tell them the death tax is wrong," Pat Wolff, a tax specialist with the
American Farm Bureau Federation, said Thursday.
Dean Garritson, an
official of the National Assn. of Manufacturers, said that his group called on
its members who personally know senators to press for the repeal bill. "That
relationship . . . added a lot of power to our lobbying," he said.
Typifying the opposition to the bill, Boxer said during debate: "Whose
side are the Republicans on? The Donald Trumps, the Leona Helmsleys. Whose side
are the Democrats on? Ordinary working, middle-class families."
Daschle
said that the repeal effort "leaves out too many people. And it still eats up
the money that America needs for other things."
Republican lawmakers
responded with stories about constituents who lost farms or small businesses to
pay inheritance taxes.
"It has been said that there are only two
certainties: death and taxes," said Sen. William V. Roth Jr. (R-Del.). "The two
are bad enough, but leave it to the federal government to find a way to make
them worse by adding them together."
LOAD-DATE: July
14, 2000