Republicans Prepare for Estate Tax Override

Setting up another veto confrontation with President Clinton, congressional Republicans today will send the White House a bill that would gradually repeal estate taxes.

Assuming Clinton follows through on his threats, GOP leaders hope to stage an election-year veto override attempt soon after Congress reconvenes in September.

“A veto is a win for big government, high taxes and more stalemate,” said Rep. Bill Archer (R-Texas), chairman of the House Ways and Means Committee, outlining the difficult spot in which Democrats could find themselves. “A signature is a win for families, small-business owners and farmers who are haunted by this unfair tax.”

The legislation, which would gradually phase out the “death” tax over 10 years at a cost of $105 billion, passed the House and Senate earlier this summer with sizable Democratic support.

But Republican leaders kept the bill tucked away on Capitol Hill, waiting for an opportune time to send it to Clinton.

Timing is just one part of the plan.

The bill will be delivered to the White House by a Montana farmer driving a tractor, said an aide to House Speaker J. Dennis Hastert (R-Ill.).

Hastert also planned an event today at a farmers market in Columbia, S.C., to highlight the effect estate taxes have on farmers, small businesses and high-tech entrepreneurs.

Under the Constitution, Clinton will have until just after Labor Day to sign or veto the bill, meaning GOP leaders could hold the override vote the first week or two after Congress returns from its summer recess.

White House officials said Clinton would certainly veto it, saying it primarily benefits the wealthy and would consume $750 billion of projected surpluses during the 10 years after the tax is fully repealed.

“The more people learn about the dangerous exploding nature of this tax plan, the less they like it,” said White House spokesman Jake Siewert. “We think you could do more targeted estate tax relief that takes care of the small businesses and family farms.”

Earlier this month, Clinton vetoed another big Republican tax cut: the 10-year, $292-billion bill that would have eliminated the income tax “penalty” paid by millions of married couples. Republicans are likely to also attempt a veto override on that bill.

Sixty-five Democrats joined all Republicans in the House vote to pass the estate tax repeal bill in June, exceeding the two-thirds threshold necessary to override a veto.

But House Democrats say a combination of absentees and a handful of switched votes will give them the margin to sustain the veto. The bill is HR 8.

Heirs of only about 2% of all Americans who die each year are forced to pay estate taxes, mainly because of a $675,000 exemption that a married couple can double with simple planning steps.

The exemptions are even higher for farmers and small businesses, but many are still forced to buy costly insurance policies and pay lawyers and accountants to protect hard-earned assets from a tax that reaches 55%.

“In essence, we’ve been planning for our deaths for about 20 years,” said Dan McGregor, president of a 325-employee auto parts manufacturing company in Springfield, Ohio. “The older we get, the more onerous the planning is.”

Republicans have long sought to get rid of the “death” tax, but it has only begun to resonate in these recent prosperous times, notably among blacks and Latinos who are increasingly building successful businesses.

Republican presidential nominee George W. Bush advocates repeal of the tax, while Democratic nominee Al Gore favors simplifying exemptions and raising them for farmers and small businesses.