CLINTON VETOES ESTATE TAX REPEAL

By: Todd Shields

Proponents Include Family-owned Newspapers





by Todd Shields



President Clinton today vetoed a bill to repeal the federal estate
tax, considered a threat to continued family ownership of the
dwindling band of independent newspapers.



Clinton said the bill was too costly and favored the rich. Republicans
said they would try to override the veto by winning a two-thirds vote
for the bill in each house of Congress, but the White House predicted
they would fail.



Estate tax repeal passed the House in June with 65 Democrats joining
the Republican majority in a 279-to-136 vote – barely above the
two-thirds margin. The next month, the measure passed the Senate on a
59-to-39 vote.



Clinton called the repeal part of a Republican strategy of broad tax
cuts that would imprudently spend much of projected federal budget
surpluses. ‘It fails on grounds of fiscal responsibility – it costs too
much – and it fails on grounds of fairness,’ Clinton said.


The White House said the repeal would benefit 2% of estates, at a cost
of $105 billion over 10 years. The tax ranges up to 55% of estates,
although most heirs pay less.



Rep. Jennifer Dunn (R-Wash), who joined Rep. John S. Tanner (D-Tenn.)
in co-sponsoring the repeal measure, said she was ‘deeply disappointed’
by the veto. She pointed to opinion polls that show most Americans
oppose the tax.



‘While Clinton and Gore may support the government confiscation of more
than half of a person’s life work, 80% of Americans find this unfair,’
Dunn said.



The rhetoric from both sides indicates the estate tax – and broader Republican-backed tax cuts – will be an issue in the fall campaign.



Among newspaper owners, Frank Blethen, publisher of the family-held
Seattle Times, has been active in opposing the tax. After viewing part
of the televised veto ceremony, Blethen said Clinton had used
‘class-warfare rhetoric.’



Blethen predicted a repeal of the tax would eventually pass. ‘This is
a classic example of something that’s truly grassroots,’ he said.


Few people in Washington cared about the issue several years ago,
Blethen said. He contrasted that indifference with the recent success
before Congress. ‘This is a real cause to rejoice and redouble our
efforts,’ he said.



Blethen called The Seattle Times the largest remaining family-held
newspaper. He said many families have sold rather than face the struggle
of transferring ownership against prohibitive tax rates, and continuing
expensive investments.


Independently owned newspapers’ percentage of daily newspaper circulation
has dropped from 90% in 1990 to an estimated 14% in 1998 – a figure that
likely has dropped further amid further consolidation in the industry,
according to brokers Dirks, Van Essen & Murray.





~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~



Todd Shields (tshields@editorandpublisher.com) is the Washington editor
for E&P.



Related stories:

PROSPECT FOR DEATH TAX REPEAL IS POOR (05/31/00)



CLINTON VETOES ESTATE TAX (09/23/99)























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