Senate vote on repeal of estate tax debated Thursday night; vote due Friday

July 13, 2000
Web posted at: 10:43 p.m. EDT (0243 GMT)

CAPITOL HILL (CNN) -- The Senate debated Thursday night a bill that would eliminate the estate tax, a tax that applies to a relatively small number of wealthy estates when they're passed on after death.

A vote on the Senate floor is scheduled for Friday.

The bill is expected to pass, but is not expected to carry enough votes to override a presidential veto. President Clinton has pledged to veto the measure.

The Republican bill would eliminate the estate tax -- what Republicans refer to as the "death tax"-- over the next 10 years.

"It takes death out of the equation," said Sen. Jon Kyl (R-Arizona) a key supporter, "It removes that horrible Hobsonian choice that a family must make at the worst possible time to deal with it."

Republicans argued the repeal was needed to avoid a "double tax" on large estates.

"The death tax is growing increasingly unpopular with the American people and it's for obvious reasons," said Sen. Tim Hutchinson (R-Arkansas). "They know double taxation when they see it. They know that if they pay income tax, they pay capital gains tax, they pay sales tax, that it's absolutely, fundamentally, inherently wrong to make death another taxable event!"

The repeal would be phased in and would cost about $105 billion in tax revenue during the first 10 years. After 2010, the Treasury Department estimates the loss of the estate tax revenue would cost about $70 billion per year.

Democrats argued strongly against the measure, saying it was too expensive and benefited too few people. Currently, only about 2 percent of all estates were eligible to pay the estate tax.

"The Republicans are looking after the interests of the wealthiest people in this country and many of us believe that we should be debating what we are going to do to protect the hard working Americans that are making the minimum wage," an angry Sen. Edward Kennedy (D-Massachusetts) shouted.

Democrats offered their own more targeted proposal that would eliminate the estate tax on family-owned businesses or farms. But that alternative was voted down.

The debate on the Republican measure continued after hours of debate on various amendments.

Senators did pass one amendment Thursday night: an amendment to repeal the 3 percent telephone excise tax.

One proposed amendment from Republican Sen. Spencer Abraham of Michigan would have temporarily suspended the 18 cents-per-gallon gasoline tax. It was defeated by a vote of 40-59.

Republicans are pushing to have a Friday vote on the estate tax -- followed by debate over a repeal of the marriage penalty tax -- for a reason. Once these bills reach the president's desk, he has 10 days to veto them.

Republicans in the Senate do not want him to veto the measure during the Republican convention in Philadelphia later this month.

One Republican aide said the Republicans are in a win-win situation. If President Clinton changes his mind and signs the estate tax bill, they win tax relief. If as expected the measure is vetoed, Republicans will win a political issue they can use against Democrats in this campaign season.

CNN Correspondent Kate Snow and Producer Dana Bash contributed to this report.