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137 6 GOP Campaign to Kill the “Death Tax” [N]o advantage comes either to the country as a whole or the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax. —President Theodore Roosevelt (1907) [I]nherited economic power is inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government. —President Franklin Roosevelt (1935) [T]he estate tax is a monster that must be exterminated. —Senate Majority Leader Trent Lott of Mississippi (1997) Throughout the 1990s, Republicans talked about repealing the federal estate tax, along with the federal gift tax and the so-called generation-skipping transfer tax. The campaign finally began to bear fruit in the twenty-first century. For example , on June 9, 2000, amid much hoopla, the U.S. House of Representatives voted by a lopsided margin of 279–136 to repeal the estate tax. While the legislative initiative was orchestrated by the House Republican leadership, 50 Democrats joined as cosponsors and 65 actually voted for the bill. A few Democrats even attended a pep rally held on the steps of the Capitol Building prior to the vote to kill what Republicans, on the advice of their pollster Frank Luntz, now derisively refer to as the “death tax.” The Death Tax Elimination Act of 2000 (H.R. 8) would have phased out the estate tax over ten years and carried an estimated price tag of $20 billion over five years, $105 billion over ten years, and about $50 billion a year thereafter. Later that summer, the Senate approved the bill and sent it up to the White House. As expected, President Clinton vetoed the Republican legislation. In September, the House came up 14 votes shy of the two-thirds majority needed to override the President’s veto. Thereafter, Republicans took the issue out on the campaign trail in an effort to drum up additional support for their cause. GOP Campaign to Kill the “Death Tax” 138 Any chance of the Republican effort succeeding would have to wait until Bill Clinton left the White House. GOP presidential candidate George W. Bush pledged his support for the effort to repeal the estate tax. True to his word, the new President proposed relief in the tax plan that he presented to Congress on February 27, 2001. The exact details of the President’s proposal were fuzzy, but he was definitely on board. That gave new life to the campaign against the estate tax. A partial victory was achieved in May when Congress enacted the Economic Growth and Tax Relief Reconciliation Act of 2001, which provided for phasing out the estate tax over nine years—after which the estate tax would be repealed, and then reinstated under the bizarre sunset provision that applies to most of the tax provisions in the bill. In addition, the gift tax was retained for inter vivos (lifetime) transfers in excess of $1 million. Such gifts will be taxed at the current maximum rate for the income tax. So Republicans did not exactly get their entire wish fulfilled. Likewise, Republicans understand that there is plenty of time for Democrats to regain control of Congress, as well as the White House, and reenact a new version of the estate tax even before the old one actually expires on December 31, 2009. Still, for the time being, antitax Republicans had good reason to celebrate their triumph. GOP Crusade to Repeal the Estate Tax The Republican crusade to repeal the federal gift and estate taxes (which in 1976 were combined into a single “unified” tax on all transfers of wealth) can be traced to the 1994 Contract with America electoral campaign, although Republican opposition to wealth transfer taxes in general goes back to the Civil War. After the GOP took control of Congress following the November 1994 elections, countless bills were introduced to modify or eliminate the gift and estate tax. Surprisingly, despite strong support within Republican ranks, the campaign did not bear fruit in the 1990s. True, several efforts came close. Before the Death Tax Elimination Act of 2000, Republicans passed the Taxpayer Refund and Relief Act of 1999, which also included a provision that would have phased out the estate and gift taxes. But that omnibus revenue package (which implemented a hefty $792 billion tax cut over ten years) was never serious legislation, as President Clinton made...

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