[Congressional Record Volume 141, Number 103 (Thursday, June 22, 1995)]
[Senate]
[Pages S8958-S8959]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                WHITE HOUSE CONFERENCE ON SMALL BUSINESS

 Mr. KYL. Mr. President, the White House Conference on Small 
Business [[Page S 8959]] met earlier this month to consider issues of 
concern to small business men and women around the country, and to make 
recommendations to this Congress about what it can do to make Federal 
policy more responsive to small business's needs.
  The men and women who attended the conference represent a vital 
economic force in the country. There are more than 20 million small 
businesses in the United States, and they represent the fastest growing 
sector of the economy. Small businesses provided all of the net new 
jobs created between 1987 and 1992. They employed 54 percent of the 
private work force in 1990. Small businesses provide two of every three 
new workers with their first job. Small businesses contributed 40 
percent of the Nation's new high-technology jobs during the past 
decade. Together, they truly represent the engine that drives our 
Nation's economy.
  So when small business leaders speak out on issues of concern, it 
would behoove the members of the Senate and the House to listen. These 
small business people are the innovators and the job creators. They are 
the ones on the front lines who have to wade through government rules 
and regulations every day, pay the taxes, and still find a way to 
compete in domestic and international markets.
  If we are interested in economic growth and opportunity in this 
country--if we want an economy that is healthy and creating new jobs, 
and can compete around the world--we ought to take note of what small 
businessmen and women have to tell us.
  And, Mr. President, this is what the delegates to the White House 
Conference had to say--these are the top-ten vote-getting resolutions 
approved by the Conference:
  No. 1: Clarify the definition of independent contractor for tax 
purposes--1,471 votes. The Conference called on Congress to recognize 
the legitimacy of an independent contractor; to develop more realistic 
and consistent guidelines for IRS auditors, courts, employers and State 
agencies to follow.
  No. 2: Permit a 100 percent deduction for business meal and 
entertainment expenses--1,444 votes. Small businesses typically rely on 
close personal relationships and customer service to compete for sales, 
rather than expensive advertising campaigns. Expenditures for meals and 
entertainment are often an important part of that effort.
  No. 3: Strengthen the Regulatory Flexibility Act--1,398 votes. In 
addition to making the act applicable to all Federal agencies, the 
Conference recommended that cost-benefit analyses, scientific benefit 
analyses, and risks assessments be required.
  No. 4: Repeal the Federal estate, gift, and generation-skipping 
transfer tax laws--1,385 votes. As the members of the Conference noted 
in their resolution, ``the negative effect (of these transfer taxes) on 
small business, and others, far exceeds the net income to the 
Government when all administrative costs to individuals, businesses, 
and government are considered.''
  No. 5: Reform the Superfund law--1,371 votes. Delegates recommended 
the elimination of retroactive and strict liability prior to 1987, and 
called for sound science, realistic risk assessments, and cost-benefit 
analyses in assessing health and environmental hazards.
  Mr. President, we ought to act promptly on all of these issues; bring 
them to the floor, debate them and vote on each of them at the earliest 
date practicable. I wanted to begin today, however, by speaking about 
one of the top five resolutions in particular, the one that received 
the fourth highest number of votes, a resolution that endorsed the 
Family Heritage Preservation Act, S. 628.
  I introduced that measure earlier this year with the distinguished 
Senator from North Carolina, Senator Helms. Representative Chris Cox 
introduced the companion bill in the House of Representatives.
  The Federal estate tax is actually one of the most wasteful and 
unfair taxes on the books today, and it is no wonder that small 
business leaders are urging its repeal. By confiscating up to 55 
percent of a family's after-tax savings, it penalizes people for a 
lifetime of hard work, savings, and investment. It hurts small business 
and costs jobs. The result is that people spend their time, energy, and 
money trying to avoid the tax--for example, by setting up trusts and 
other devices--rather than devoting their resources to more productive 
economic uses.
  The estate tax hits small family businesses particularly hard. It 
strips companies of much-needed capital at the worst possible time--
under a change of ownership and oversight following the principle 
owner's death.
  According to a 1993 survey by Prince and Associates--a Stratford, CT 
research and consulting firm--9 out of 10 family businesses that failed 
within 3 years of the principal owner's death said that ``trouble 
paying estate taxes'' contributed to their companies' demise. Sixty 
percent of family-owned businesses fail to make it to the second 
generation, and 90 percent do not make it to a third generation.
  If the Tax Code were revised to eliminate these transfer taxes, small 
businesses would have a fighting chance; and the Nation would likely 
experience significant economic benefits by the year 2000. According to 
a report by the Institute for Research on the Economics of Taxation 
[IRET] ``GDP would be $79.22 billion greater, 228,000 more people would 
be employed, and the amount of accumulated savings and capital would be 
$630 billion larger than projected under present law'' by the end of 
the century.
  Small business leaders recognize how counterproductive the estate tax 
really is, and that's why they specifically endorsed the Family 
Heritage Preservation Act at the White House Conference. That's why my 
bill is supported by the Small Business Council of America, the Small 
Business Survival Committee, Americans for Tax Reform, and the 60 Plus 
Association. The National Federation of Independent Business and the 
Independent Forest Products Association have called for estate tax 
reform.
  Mr. President, I want to conclude by thanking the delegates to the 
White House Conference for their thoughtful, hard work. And, I wanted 
to make special note of the work of Mary Lou Bessette, who chaired the 
Arizona State delegation and carried out her responsibilities in an 
exemplary manner. She kept the group focused and on track, and was well 
respected by its members. Another member of the delegation, Sandy 
Abalos, served as Arizona tax chair. Her hard work and determination 
were reflected in the successful outcome of the Conference.
  And finally, I wanted to commend Joy Staveley, who was my appointment 
to the Conference, and who served as environmental chair for the State. 
All four of her environmental resolutions made it into the top 60 final 
recommendations to emerge from the Conference session.
  A job well done to all the members of Arizona's delegation and to all 
the delegates from around the country. Now it's time for the Senate and 
House to act on the good advice from the leaders of the Nation's small 
businesses. I invite my colleagues to join me as a cosponsor of the 
Family Heritage Preservation Act, and to begin addressing the other 
recommendations of the White House Conference as well.


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