Clinton Promises To Veto Estate Tax Bill

Mike Godfrey, Tax-news.com, New York

12 June 2000

After the House of Representatives passed the Republicans' bill to abolish inheritance tax with the support of many democrats by 279 to 136 votes on Friday (enough to overturn a presidential veto), the President nonetheless stood his ground: 'If this bill were presented to me in its current form, I would veto it without hesitation', he said on Friday.

Clinton said that the bill would cost $750bn in the 10 years after the tax is fully repealed in 2010.

Senate Minority Leader Tom Daschle (Dem, S Dakota) said: 'We're talking about a tremendous sum of money; if they want the accomplishment, they're going to have to compromise'.

A compromise Democrat-sponsored bill, which would cost only $22bn in the 10-year phase-out period (as opposed to $105bn for the Republican bill) was voted down by 222 votes to 196.

It's difficult to work out who's right: the Republicans and renegade Democrats who say that the tax is a job- and business-killer, or the Democrats who say that the country can't afford to lose a redistributive tax collected from a tiny minority of extremely rich people. In modern times, economists have inclined to the view that inheritance taxes are economically wasteful. It seems as though a bill will go through in the end, sculpted as a compromise between the two variants on offer.

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