A bill currently before President Bill Clinton proposes the elimination of the estate tax. The Senate voted to repeal the so-called “death tax” on Friday, just eight votes short of the two-thirds majority necessary to override the expected presidential veto. Although the “death tax” is an onerous duty that punishes success, and our entire tax structure desperately needs rehauling, Clinton should veto the bill in favor of a similar but weaker Democrat version.
Woodrow Wilson signed the estate tax into law in 1916 to fund World War I. Both Teddy Roosevelt and Franklin Delano Roosevelt supported the tax, with the hope that it would reduce the disparity between the rich and the poor. America’s recent prosperity, however, has increased the number of millionaires and the likelihood that average citizens will see similar wealth, in effect spurring public opinion to favor killing the “death tax.” A June Gallup poll showed 60 percent of Americans favor repeal.
For this reason, the number of Democrats who endorsed the bill was suprisingly high when Clinton’s stern opposition is considered. Sixty-three Democrats in the House defected and helped pass the Republican-led effort 279 to 136 votes. This inspired minority Senate leaders to propose a raise in the value of estate tax-exempt estates from the current rate of $675,000 to $2 million, $4 million for couples.
The Democrat plan would eliminate the “death tax” for about two-thirds of those who would face it. Its focus on helping small businesses and family-owned farms — the primary intent of the Republican bill — makes the Democrat proposal an appealing alternative to total repeal.