WASHINGTON - The House on Friday approved by a vote of 279 to 136 legislation that would eliminate the federal estate tax within a decade. Under the bill, the current top tax rate of 55% on inheritances would be lowered to 50% in 2002 and gradually scaled back until it disappears in 2010. Republicans estimate that it would provide $28 billion in tax relief within the first five years.
Banking industry officials praised the legislation.
"The estate tax threatens the continued viability of family-owned community banks, small businesses, and family farms and jeopardizes the local economies they support," said John Evans, president of D.L. Evans Bank in Burley, Idaho, on behalf of the Independent Community Bankers of America. "We're glad the House recognized that estate taxes can lead to the demise of many small family-owned businesses and has passed much-needed relief."
President Clinton has threatened to veto the bill, which he and many Democrats consider a tax break for the wealthy. But Republicans noted the House tally is a veto-proof majority, and the President has expressed interest in a compromise.