[Congressional Record Volume 143, Number 16 (Monday, February 10, 1997)]
[Senate]
[Pages S1200-S1201]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           ESTATE TAX REFORM

 Mr. ABRAHAM. Mr. President, earlier this year, I joined 
Senator Kyl and others in introducing legislation which

[[Page S1201]]

would eliminate the Federal estate tax. In terms of helping families, 
encouraging economic growth, and simple tax fairness, eliminating the 
estate tax is one of the most meaningful steps Congress can take, and I 
intend to work with Members from both parties to move this legislation 
through Congress and on to the President's desk.
  Mr. President, the estate tax was first instituted in 1916 as a means 
of raising revenue and redistributing wealth. It has largely failed on 
both accounts. On the other hand, it has had a severe and adverse 
impact upon millions of families, it has destroyed innumerable family 
owned businesses, and it has created perverse incentives that encourage 
parents to spend their savings now, rather than pass them on to their 
children later. As the National Commission on Economic Growth noted in 
its report:

       It makes little sense and is patently unfair to impose 
     extra taxes on people who choose to pass their assets on to 
     their children and grandchildren instead of spending them 
     lavishly on themselves. Families faced with these 
     confiscatory taxes often find themselves forced to sell off 
     farms or businesses, destroying jobs in the process.

  I believe the Kemp Commission was exactly right. The estate tax is 
simply devastating to entrepreneurs and farmers. By forcing the sale of 
many businesses, the tax causes untold hardship and turmoil in families 
already dealing with the loss of a loved one. It has been estimated 
that 70 percent of all businesses never make it past the first 
generation, while 90 percent do not make it past the second generation. 
I believe the estate tax is responsible for much of this failure.
  Worse, this destruction of businesses and loss of jobs cannot be 
justified for budget reasons. The estate tax raises little money for 
the Federal Government. Historically, the estate tax raises less than 2 
percent of total Federal revenues. According to many observers, this 
amount is less than the cost the estate tax imposes to both government 
and the economy.
  In conclusion, Mr. President, let me say that the estate tax is 
simply unfair. It tells every American that no matter how hard you work 
or how wisely you manage your affairs, in the end the Federal 
Government is going to step in and take it away. The estate tax is 
double and, in some cases triple taxation, it punishes hard work and 
wealth creation, and it fails to raise the kind of revenue that could 
possibly justify the damage it causes. It has been destroying 
businesses and ruining lives for four generations now, and it is my 
hope we can act in this Congress so it will not afflict yet another 
generation of Americans.

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