[Congressional Record Volume 142, Number 141 (Thursday, October 3, 1996)]
[Senate]
[Page S12258]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              TRANSFER OF SMALL BUSINESS AND FAMILY FARMS

  Mr. DORGAN. Madam President, I want to mention two quick pieces of 
business. I have introduced a piece of legislation at the end of this 
Congress, intending to take it up in January again when a new Congress 
convenes, dealing with the estate taxes that we now have in our 
country. My piece of legislation deals specifically with the transfer 
of small businesses and family farms from parents to children.
  The economy in this country is a kind of an interesting economy. We 
have large corporations which are given life only because we have given 
them life by law. We have said, by law, we will allow there to be 
created artificial people. They can sue and be sued, contract and be 
contracted with, even have names, but they are artificial. They don't 
live. They don't give blood. They don't have a beating heart. It is an 
artificial person. A corporation is recognized in law as artificial.
  The interesting thing about the corporation is that it doesn't die. 
General Motors might get long in the tooth, but General Motors isn't 
going to die. It isn't going to have kidney failure or have heart 
disease. General Motors won't die. But a small business run by a 
husband and wife or a family is different. The husband and wife who 
start the business and run the business, they die.
  So what happens when a family farm or a family business finds itself 
in a circumstance where the mother and the father who started that 
business and were running that business pass away. What happens when 
they want to transfer that business to the son or daughter?
  Well, what happens too often is the son and daughter end up owning 
the business, plus a $300,000 or $400,000 tax bill from an estate tax 
burden that they must pay in order to run the business that their 
father and mother started. That does not make much sense to me.
  Our incentive ought to be to try to say to the children, ``You want 
to continue to run the family business? We want to help you do that. 
It's in our interest to help you do that.'' It is in our interest to 
continue those jobs and to see that businesses continue, as a family 
farmer or family business.
  I have proposed a piece of legislation which would provide for up to 
$1.5 million of transferred assets to the children without an estate 
tax obligation. Those children can then inherit a business and be able 
to run the business, providing they want to run it.
  If they do not want to run the family business, as far as I am 
concerned, whatever the current estate tax is, that is the tax imposed. 
If they want to continue to run that business for the next 10 years, I 
want that family farmer or business to operate without a crushing 
burden of estate taxes. And my legislation will accomplish that.
  The estate tax was originally conceived during the Civil War to 
finance the Civil War. It has had fits and starts and various turns 
since then. We ought to make certain the estate tax, as a revenue 
device, does not interrupt the continuity of a family business or 
family farm in which the children wish to continue as a viable family 
business or family farm.
  That was the intent of the legislation I have introduced at the end 
of this session. Of course, without an opportunity for action on it, I 
will have to, in January or February, in the new Congress, turn to it 
again and see if we can make some progress on it. I expect there will 
be bipartisan support for legislation of this type, and I hope that we 
will see some success.

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