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Saturday, September 9, 2000

Compromise is needed
to reform estate tax

Bullet The issue: An attempt to override President Clinton's veto of a bill abolishing the estate tax has failed.

Bullet Our view: A compromise is needed to ease the effect of the tax.

REPS. Neil Abercrombie and Patsy Mink are right in calling for a Democratic-Republican compromise to make the estate tax less onerous. The Hawaii Democrats voted with 51 other Democrats and 221 Republicans in an unsuccessful bid to override President Clinton's veto of a bill abolishing the tax.

The veto was justified because the measure would have given a huge tax break to the wealthy and further increased the extreme concentration of wealth in this country. Clinton said the bill would have given the richest 3,000 families an average tax cut of $7 million. Does anybody think they need it?

However, there is a need, as Abercrombie and Mink stated, to shield persons of moderate wealth, especially those who inherit farms and small businesses that may have to be sold to pay the estate tax.

A Democratic alternative proposal that was rejected by the Senate in July was more reasonable and appropriate than outright repeal, basically doubling the exemptions. It would have increased the value of estates exempted from the tax to $2 million by 2009; current law limits the exemption to $675,000, rising to $1 million by 2006. In addition, the exemption for family-owned farms and businesses would have been raised to $3.38 million; current law limits the exemption to $1.3 million.

Mink said she didn't vote for the override because she favors repeal of the estate tax but to send a message to both parties that they should seek a compromise.

"Clearly the estate tax has had a deleterious effect on successful persons who hope to pass along homes to their children," she said, adding that property values are inflated in Hawaii, with the result that properties that would not be subject to the estate tax on the mainland are subject to the tax in the islands.

Abercrombie said he understands that Republican leaders are reluctant to talk to Clinton about a compromise. But he warned that if they fail to seek a compromise, "I think people will see it as a political agenda."

Well, of course. With elections approaching, politicians are posturing in ways they think will win them votes. Passing important legislation, unfortunately, gets a much lower priority. If voters weren't fooled by the posturing, it would stop.

However, the need for compromise is real. The estate tax needs reform, not repeal. It should be reserved for the ultra-rich and spare the moderately successful.

Violence in West Timor

Bullet The issue: Three United Nations aid workers were killed in Indonesian West Timor.

Bullet Our view: The attack may have been intended to discredit President Abdurrahman Wahid.

ONE year after East Timor's bloody emergence as an independent nation, an outburst of violence across the border in West Timor has served as a grim reminder that the island is still a turbulent place. A pro-Indonesian gang killed three United Nations workers, prompting the U.N. to withdraw all of its staff members from the province. That left 90,000 refugees from East Timor without international aid.

The three victims, employees of the United Nations High Commissioner for Refugees, were working in refugee camps in the border town of Atambua. The men, from Puerto Rico, Croatia and Ethiopia, were hacked to death by machete-wielding militiamen. The attack followed the killing of a militia leader who had been named as a suspect in human-rights violations in East Timor.

Pro-Indonesian militias destroyed much of East Timor and herded 300,000 East Timorese across the border after the people voted in a referendum in August 1999 to end Indonesian rule. The militias have taken control of the camps and prevent the refugees from returning to East Timor.

The deaths came just a week after the United Nations resumed aid work in West Timor, having suspended operations there previously because of attacks on its staff. Diplomats said there had been warnings to aid workers not to return to the area without adequate protection.

There were fears the killings were committed in order to discredit Indonesian President Abdurrahman Wahid. The army, which was dominant in the government of former President Suharto, has lost much of its influence in Jakarta since Suharto was overthrown two years ago.

However, Wahid has been unable to control the military and his grip on power is tenuous. The attack occurred while the president was in New York for the United Nations summit meeting. Both Wahid and U.N. Secretary-General Kofi Annan expressed suspicion that the attack was designed to embarrass the Indonesian leader.

The president said he had ordered 2,000 troops to the area and arrests had been made. But the pro-Jakarta militias that created havoc in East Timor a year ago may be too much for the army to handle -- assuming it has the will to do so.

A widely respected Muslim cleric, Wahid was elected president by parliament last October. But his erratic behavior and casual approach to his responsibilities have provoked strong criticism, leading to speculation that he might be forced to resign or relinquish some of his authority.

The violence in West Timor seems to illustrate the president's weakness and the continued extreme volatility of Indonesian politics. Wahid must find a way to rally his supporters and become a more effective leader or risk an unraveling of the government of Southeast Asia's largest nation.

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor

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