WASHINGTON -- President Clinton is holding tough on his threat to veto House-passed legislation that eventually would abolish the federal inheritance tax, calling it too expensive and a ''windfall'' for the rich.
''If this bill were presented to me in its current form, I would veto it without hesitation,'' the president said Friday after the House Republicans brushed aside a Democratic alternative and passed their bill 279-136.
It would repeal the tax gradually by 2010. Clinton's statement on the vote said it would cost losses of $750 billion in the decade after repeal is in place.
Joined by 65 Democrats, Republicans ignored Clinton's veto threat and sent the repeal bill to the Senate. Supporters said they were acting to prevent taxes from ruining family farms and small businesses, but detractors decried it as a costly giveaway to the wealthiest Americans.
The bill would cost $105 billion during the 10-year phaseout by cutting the top 55 percent federal rate in 2001 and gradually reduce all other rates until 2010. While the bill doesn't directly affect state inheritance taxes, many link collections to the federal tax and would have to be rewritten to continue in force.
Only about 2 percent of families of people who die pay the estate tax, which applies this year to estates above $675,000 for an individual.
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