[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2074 Introduced in Senate (IS)]







104th CONGRESS
  2d Session
                                S. 2074

 To repeal the Federal estate and gift taxes and the tax on generation-
                          skipping transfers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 13, 1996

 Mr. Thurmond introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To repeal the Federal estate and gift taxes and the tax on generation-
                          skipping transfers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Estate and Gift Taxes Repeal Act of 
1996''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Federal estate and gift tax structure is an unfair 
        and inefficient revenue source. Such taxes represent a multiple 
        tax on earnings. After paying income taxes, capital gains 
        taxes, and property taxes, lifetime savings are finally 
        subjected to estate taxes at rates that are generally higher 
        than income tax rates.
            (2) Owners of family-owned businesses and farms are among 
        those who suffer the greatest impact of such taxes. Many 
        businesses fail after the death of the founder because of 
        estate taxes. Families faced with these taxes are often forced 
        to liquidate farms or businesses to pay estate taxes. In the 
        process, jobs and financial security for family members and 
        employees are destroyed.
            (3) The estate tax results in inefficiency in the economy 
        because of ``estate planning'' and other tax avoidance 
        mechanisms.
            (4) Estate and gift taxes have a negative impact on 
        economic growth. Such taxes foster spending and consumption, 
        rather than savings and investment. Repeal of these taxes would 
        result in increased capital formation, additional jobs, and a 
        higher gross domestic product. Increased economic activity and 
        investments would also result in additional personal and 
        corporate income tax revenues.
            (5) Estate and gift taxes are a minor revenue source for 
        the Federal Government. In fiscal year 1995, estate and gift 
        taxes accounted for only 1 percent of total Federal receipts. 
        Furthermore, the Government spends billions of dollars each 
        year for administrative and compliance costs for these taxes.
            (6) The repeal of Federal estate and gift taxes is 
        consistent with and will be a major step toward establishing a 
        tax code based on fairness, simplicity, neutrality, visibility, 
        and stability.

SEC. 3. REPEAL OF FEDERAL TRANSFER TAXES.

    (a) General Rule.--Subtitle B of the Internal Revenue Code of 1986 
is hereby repealed.
    (b) Effective Date.--The repeal made by subsection (a) shall apply 
to the estates of decedents dying, and gifts and generation-skipping 
transfers made, after the date of the enactment of this Act.
                                 <all>