[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[Extensions of Remarks]
[Page E1174]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


      FAMILY FARM AND SMALL BUSINESS ESTATE TAX RELIEF ACT OF 1997

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                           HON. BOB ETHERIDGE

                           of north carolina

                    in the house of representatives

                         Tuesday, June 10, 1997

  Mr. ETHERIDGE. Mr. Speaker, today I am introducing legislation 
designed to help preserve and protect our Nation's most valuable 
assets: Families and Family-Owned Businesses.
  Family-owned farms and small businesses are the backbone of my State 
and our Nation. They employ our people, generate economic growth and 
strengthen our communities. However, Uncle Sam has socked it to family-
owned businesses over the years with increasing regulations and taxes. 
Families are finding it harder and harder to continue operating the 
family business.
  One of the largest obstacles to staying in business for families is 
Federal estate taxes or death taxes. Before a family has even had the 
opportunity to properly mourn the passing of a loved one they must 
begin to face the task of settling the estate. Often a family must 
endure two deaths; the death of a loved one followed by the death of a 
business. With tax rates as high as 55 percent on assets in excess of 
$600,000, death taxes can sap the lifeblood out of a family-owned 
business and in many cases force the sale of the entire business to 
settle up with the IRS. Family farms and small businesses are 
frequently cash poor but rich in assets such as land and equipment. The 
current $600,000 exemption can often be eaten up in the increased value 
of land which often has no correlation to the income generating value 
of the business.
  Small businesses and family farm make up 98 percent of all businesses 
in North Carolina and employ over 50 percent of all workers in North 
Carolina. The $600,000 exemption is too low and places a burden on some 
family-owned businesses so severe they cannot survive. People labor too 
long and hard throughout their lives to see the fruits of their work 
disappear into Uncle Sam's pockets.
  That is why today I am introducing the Family Farm and Small Business 
Estate Tax Relief Act of 1997. This bill will raise the current 
exemption for family-owned farms and small businesses from $600,000 to 
$1.5 million. It will also index the exemption to inflation, something 
that should have been done a long time ago.
  The current estate tax is an unfair double tax on assets generated 
through income that has already been taxed. It is a disincentive to 
saving, hard work and entrepreneurship. Current policy undermines 
everything that is great about America: family, ingenuity, hard work, 
and providing for the economic security of our children.
  There are thousands of Americans across this country that play by the 
rules and work hard only to be faced with the prospect that their very 
success will saddle their children with a burden so great that it will 
force them to abandon the only livelihoods they have ever known.
  According to the Congressional Research Service 70 percent of family 
owned businesses do not survive to the second generation and 87 percent 
do not survive to the third. This is wrong and it must stop. The Family 
Farm and Small Business Estate Tax Relief Act is good for our economy, 
is good for families and is good for America.
  I would like to take this opportunity to thank the National 
Federation of Independent Business (NFIB) and the North Carolina Farm 
Bureau for their support of my legislation. NFIB and the NC Farm Bureau 
understand the importance of preserving family-owned businesses.
  With the right policies we can strengthen and preserve the family 
owned business in America. I urge my colleagues to join me in support 
of this important legislation initiative.

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