As expected on Thursday afternoon, President Clinton vetoed the proposed repeal of the Estate and Gift Tax. The bill will return to Congress where legislators will attempt to override the veto.
The White House said that it did not believe the Republican-dominated Congress had enough votes to override the veto. If all those who initially voted for the passage of the bill vote to override the veto, the necessary two-thirds majority will prevail.
Under current law, the first $675,000 of property left by a deceased person is exempt from tax. The repeal, which would gradually lessen the tax over a 10-year period and would reduce cash flow to the government by a projected $105 billion, would have affected fewer than two percent of the nation's estates, according to Clinton.
The National Federation of Independent Businesses estimates that one third of all families owning businesses are forced to sell their businesses to pay estate taxes.
When Clinton commented on the bill, he said that he vetoed it because the Republicans wanted to spend too much of the projected Federal budget surplus. Clinton favors a smaller estate and gift tax reduction. The tax issue is expected to be a major point of debate during the fall campaign.