WASHINGTON (July 19, 2000)—The Senate has approved a bill to repeal the estate tax, and sent it on to President Clinton´s certain veto.
Worse for tire dealers, retreaders and other supporters of the repeal, the 59-39 Senate margin of victory on July 14—unlike the 279-136 House vote in June—is several votes short of what Congress needs to override a presidential veto.
Rebecca MacDicken, government affairs director for the Tire Association of North America, put a bright face on the vote. "We´re obviously very pleased at the passage of the bill, although we would be happier with a veto-proof margin," Ms. MacDicken said.
Roy E. Littlefield III, government affairs director for the International Tire and Rubber Association, was gloomier. "We´re disappointed about the whole thing," Mr. Littlefield said. "The current bill has a 10-year phase-in; that´s five Congresses...The bill doesn´t go far enough, fast enough, and with the veto we aren´t even going to get that."
Both the House and Senate versions of the bill will gradually phase out the estate tax until final repeal in 2006. By a 53-45 vote, the Senate approved a measure to substitute the House version of the bill for the Senate language, thus saving the time a House-Senate conference would take.
The House bill repeals the top estate tax rate of 55 percent and a 5-percent surtax on estates in 2001, with rates above 50 percent axed in 2002.
Currently, farms and small businesses valued at more than $1.3 million are subject to the estate tax. Small business representatives have fought the tax for years, claiming that heirs to family businesses often have to sell their assets merely to pay the taxes.
Democrats, however, insist that only the top 2 percent of heirs ever pay the tax, and that the cost of repeal—$105 billion over 10 years, and $50 billion annually thereafter—is an unconscionable cut in federal revenue.