WEEK ENDING AUGUST 6, 1999

• Begin phasing out the estate/death tax in 2001, leading to a full repeal in 2009.
  
• Reduce all marginal tax rates by one percentage point.
  
• Reduce the individual capital gains tax rate. The 20 percent capital gains tax rate would be reduced to 18 percent, and the 10 percent rate would be reduced to 8 percent. The capital gains tax reductions would be retroactive to January 1, 1999.

House estate tax provision prevails. AIADA has been working as a part of the Family Business Estate Tax Coalition to promote the elimination of the estate/death tax. AIADA supported including the House death tax language, which repeals the tax, rather than the Senate language, which provides only minor relief. The final bill includes the House language.

Congress to send tax cut to Clinton after August recess. With President Clinton threatening to veto the tax package as passed, Republican leaders hope to use the August recess to sell their tax cut ideas to the American public, placing political pressure on the President to sign a significant tax cut bill when Congress returns in September. The President has indicated that he will not sign a tax cut bill larger than $300 billion.

House Trade Subcommittee begins hearings on upcoming WTO meeting. The House Ways and Means Trade Subcommittee initiated hearings focusing on the negotiating objectives of the U.S. for the upcoming World Trade Organization (WTO) Ministerial meeting in Seattle. Deputy U.S. Trade Representative Sue Esserman testified on behalf of the Administration and stressed that market access, including tariff reductions, will be among the priority objectives of the U.S.

Congress adjourns until Sept. 8. Congress has recessed until September 8 for its annual August recess.