[Congressional Record Volume 143, Number 85 (Wednesday, June 18, 1997)]
[House]
[Pages H3909-H3916]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             THE DEATH TAX

  The SPEAKER pro tempore (Mr. Coble). Under the Speaker's announced 
policy of January 7, 1997, the gentleman from Mississippi [Mr. Parker] 
is recognized for 60 minutes.
  Mr. PARKER. Mr. Speaker, I have listened with interest to all of the 
different speakers today in the special orders. Many of them have been 
talking about the different tax breaks and tax cuts that we are 
discussing now. I find it very encouraging that after a long period of 
time we are finally getting around to talking about giving a break to 
the American people, something that they have needed for a long time.
  Every once in a while there comes a point when an issue comes to the 
fore and its time has truly come. I think that issue for many Americans 
is going to center around what I consider the death tax. Some people 
call it inheritance tax. Some people call it an estate tax. But it is 
truly in every sense of the word a death tax.
  At a point in a person's life when they do not need another emotional 
blow or financial blow, they have been touched by a circumstance where 
someone dies. All of a sudden the Government comes in and says, by the 
way, we are going to add to your misery. What we want to do is disrupt 
your entire life, and that is especially true for hard-working men and 
women all over this country.
  Mr. Speaker, I want to read a little story. It is about a lady, Idaho 
rancher named Lee Ann Ferris, who experienced the most devastating 
event in

[[Page H3910]]

her life after her father's death, which was terrible, in 1993. But it 
was followed by this. Her accountant told her that there would be no 
way to keep the ranch when her mother passed away. She was quoted as 
saying, I was like a dazed deer looking in the headlights. How could 
this be? We owned this land. We paid this land off.
  Ferris related her story in testimony before the other body, and she 
was testifying on the death taxes. Proponents of tax reform say that it 
is needed to help family farms and businesses survive and promote 
traditional values. Ferris told the other body's committee that the 
accountant explained to her that, upon her mother's death, the heirs 
would be liable for $3.3 million in taxes on an operation that was only 
taking in $350,000 a year.
  She then talked about costly estate planning, part of which involved 
buying a life insurance policy for her elderly mother solely for the 
purpose of paying off a third of the estate tax. That would still leave 
the family with a $2 million-plus tax bill. Millions of Americans, 
farmers, ranchers, small business people, private property owners face 
a similar grim situation. If the estate assets are worth more than 
$600,000, the Federal Government, in classic ambulance chaser style, 
will come calling for what it claims is its share as soon as the 
funeral is over.

  Farmers and ranchers work long, hard hours over a lifetime to build 
their businesses, says Charles Kruse, a member of the American Farm 
Bureau Federation board of directors and president of the Missouri Farm 
Bureau Federation. Quote, often farm heirs must sell business assets to 
pay estate taxes. When taxes drain capital from a farm business, the 
profit-making ability of the farm is destroyed and the farm business 
dies. Farmers and ranchers should be able to save for the future 
without having to worry about sharing the outcome of their efforts with 
the Federal Government, especially after already paying a lifetime of 
income taxes. Along the way they paid income taxes on their earnings. 
It is wrong to tax those earnings again at death.
  Mr. Speaker, I must tell my colleagues, as I look at this death tax 
and what we do as a Federal Government to the American people, it is 
truly what I consider immoral. How did we get to this point? I think 
that it has been a gradual process through the years. Historically, 
prior to 1916, we would have inheritance taxes from time to time. They 
normally occurred at times of war when our export market was basically 
hurt and we were not getting the revenue that we needed. So from a 
national security standpoint, we would enact as a Congress an 
inheritance tax to bring in more money to the Federal Treasury in order 
to maintain our national security. That made a tremendous amount of 
sense.
  That occurred over 100 years, our first 100 years as a nation. But in 
1916, we put into place a death tax that has pretty much remained 
constant throughout the years. The death tax was established in 1916 
basically to redistribute wealth to prevent certain families from 
amassing the majority of the Nation's riches. However, as is the case 
in most tax schemes aimed at the rich, the extremely wealthy find a way 
to stay extremely wealthy in spite of the tax. And the middle class, 
the small business entrepreneurs, are the ones who struggle. They are 
the ones that are hurt. They are the ones that have to bear the brunt 
of this tax policy.
  If we look at the death tax, as far as what it does to the Federal 
budget, roughly, we take in about 1 percent of our total revenue, our 
total annual revenue that comes in from estate taxes. My personal view 
is that the death tax is not worth the devastation it causes to family 
farms and family businesses and to the entrepreneurship that is at the 
very heart of our Nation.
  Furthermore, less than one-seventh of 1 percent of total revenue 
comes from death taxes on closely held businesses and farms. Farmers 
expect that repealing death taxes would induce them to invest in their 
businesses in ways that would enable revenue to grow 5 percent faster.
  We see the results of the death tax being a burden on the growth in 
business. More money is spent within our national economy to prevent 
family businesses from being destroyed by death tax obligations than is 
being collected by the Federal Government in the form of tax revenues.
  We hear that over and over again. There are individuals in this 
country, lawyers and accountants, who make their living trying to 
figure out ways in order to save family farms and family businesses. It 
is heard over and over again. These individuals make a very good living 
at their profession. They spend all of their time trying their best to 
create an environment so this business can just be maintained.
  A 1996 study by the Heritage Foundation found that repealing death 
and gift taxes would produce dramatically positive effects in the 
American economy over the next 9 years. The Nation's economy would 
average as much as $11 billion per year in additional output and an 
average of 145,000 additional jobs would be created. Personal income 
would rise by an average of $8 billion per year above current 
projections. And finally, the deficit would actually decline due to the 
growth generated by the abolishment of the death tax.
  This tax, and there are individuals, by the way, in our society who 
do not realize, some of them own businesses, some of them are starting 
businesses, they do not realize what is going to happen to them when 
they die, what is going to happen to this business that they have 
sweated for and hurt for and they have sacrificed their families for.

                              {time}  1600

  They are doing this for their families and for their future.
  This tax, and we have to understand how much it is, is 37 to 55 
percent of the present value of the business. It makes the death of the 
owner and the death of the small business one and the same. Nearly 80 
percent of failed family businesses that enter bankruptcy go bankrupt 
after the unexpected death of the founder. And high death tax rates 
force some heirs to sell businesses, break up that business or 
liquidate most of their assets or all of their assets.
  Any of these options is devastating to a community. It is devastating 
to the employees of that business and to their surviving owners. And 
let me point out one thing. When we talk about being devastated, we are 
talking about, for example, a family farm, where an individual buys 
land, he has a cost basis in that land, and the land has been in the 
family for 40 years. He has a cost basis in that land of a small 
amount. Let us say it is $100 an acre. But because of inflation and 
different factors, that land has increased in value.
  Now, understand that owner did not make it increase in value from the 
standpoint of inflation. We, as a government, created certain monetary 
policies, we did certain things that made the value of that land 
increase. So all of a sudden that land that began 40 years ago, that 
cost $100, all of a sudden is now worth $1,500 or $2,000.
  When that individual dies, we are talking about the Government coming 
in and saying, we created a problem by having inflation, and we 
increased the cost of this asset that is held by this individual. Now 
we are going to put this individual in a situation where they are going 
to have to pay us for the problem that we created. That is not fair.
  Now, I have heard people today talk about they do not like the 
Republican tax bill. They have talked about the estate taxes, and 
people from the other side of the aisle have been complaining about the 
estate taxes. I have news for my colleagues. I do not like the 
Republican plan either, and the reason I do not like the Republican 
estate tax plan is because it still leaves it in the law. It decreases 
the amount, but it is still law that we have a death tax.
  Mr. Speaker, I want to finish this one statement and then I am going 
to yield to the gentleman from Georgia [Mr. Kingston].
  What I want is the total elimination of the death tax. It has no 
business in our Tax Code. I believe it is un-American. I believe it is 
the most cruel tax that has ever been put on the American people.
  And with that, I will yield to the gentleman.
  Mr. KINGSTON. Mr. Speaker, I thank the gentleman, and knowing the 
interest of the gentleman from Mississippi in this death tax and the 
repeal of it, and I certainly appreciate his leadership, as do most 
taxpaying Americans, I wanted to bring an article sent

[[Page H3911]]

to me by Dr. Bert Loftman of Atlanta, that was in the Human Events 
magazine on April 18 of this year, written by Terence Jeffrey, and in 
that he goes into the history of the death tax.
  The article points out that Lincoln imposed an emergency inheritance 
tax during the Civil War but that it was repealed in 1870, and the 
reason he did it was because of the national emergency of the Civil 
War. Also this article points out that in 1894 we had a temporary 
income tax, as well, but that was also repealed.
  I guess the crowning blow that made this permanent was under 
President Wilson in 1913 when he ratified the 16th amendment that, of 
course, started the income tax law, but it also gave Congress the power 
to lay and collect taxes on income. Wilson followed that by cutting 
U.S. tariffs in half; to pay for or offset the revenue lost by imposing 
progressive taxes on the incomes of rich Americans.
  So here we have historically how this tax came about, to give foreign 
traders a tax break, and how we increased the taxes on Americans.
  What I hear over and over again, and I do not get calls from, say, 
the Rockefellers and the Morgans or the Ted Turners and the Bill Gates, 
I do not get those calls, but I do get calls from people who do not 
have big corporations and big titles. They say they have worked their 
rear end off for the last 50, 60, 70 years, and they have built up this 
family farm that has 1,800 acres right now. It has a house on it, and 
it is now worth $1.5 million.
  Now, these people paid for that farm through sweat equity and they 
paid taxes every single year this farm has been in existence, and now 
their son or daughter wants to start out being a family farmer but they 
cannot pass it on to them. So they have to go out and get a fancy 
lawyer or an accountant or an estate planner to come up with some way 
around the tax law so that they can pass what is already theirs, what 
they have already paid taxes on, to their own children so that they can 
be independent and continue being taxpayers themselves.
  This is the fundamental American dream. For liberal colleagues of 
ours to sit over here with the President of the United States and say 
no to middle class America, to say ``We want your taxes when you are 
born, when you are living, when you are working and when you are 
dying,'' that is ridiculous. The middle class in America deserve 
better.
  While we are all mourning at the funeral, Uncle Sam is there counting 
his pennies. It is absolutely ridiculous. Let people die with dignity. 
Let them die knowing that their life and their labors have not been in 
vain but that they can pass it on to the next generation.
  Mr. PARKER. Mr. Speaker, reclaiming my time, I want to tell the 
gentleman a story. I do not want to mention any names because I do not 
want to hurt anybody's feelings. On the other side of the aisle 
everybody always stands up and says, hey, this is for the wealthy, this 
is not for middle class America.
  I want to tell my colleague what the wealthy do. The wealthy will 
take care of themselves, they always have and they always will. They 
hire high-priced lawyers and high-priced accountants and they get by 
and get around anything that Congress puts out.
  Mr. KINGSTON. Let us point out, too, there are more millionaires in 
the Clinton cabinet than there were in other cabinets. If we want to 
talk rich and we want to talk class warfare, let us start with the 
Clinton cabinet.
  Mr. PARKER. Well, I want the gentleman to understand that I do not 
have anything against people being rich. I do not mind it at all.
  Let me tell the gentleman one of the problems we have. I will tell my 
colleague this story about a family. There is a family in this country, 
one of the wealthiest families we have. Everybody knows their name. 
They own some land, and they bought it dirt cheap.
  Now, I had a farmer tell me one time, ``There are a lot of things in 
the world that are dirt cheap, dirt ain't one of them,'' but I have 
news for my colleague: This particular family bought some land and they 
bought it cheap.
  Now, on this land they put some hotels. Now, they did not pay much 
for this land, but what they did, they kept it through the years and 
they had these hotels on this land, and this was a pristine area. What 
they decided they would do is, they would turn around and they would 
give away the part that was not making money.
  And they did, they gave literally thousands of acres to the Federal 
Government. Their lawyers and their accountants out of New York sat 
down and, smart people, they sat down and they devised this system 
where they were going to give the Government this land at that day's 
value but they were going to keep the moneymaking part. They were going 
to keep the hotels. They did.
  Now, in this agreement they said, now, we are going to give the 
Government this land, and it is a national park now, but they said, we 
will give the Government this land, but they are going to maintain the 
roads to our hotels, they are also going to maintain the water, they 
are also going to maintain the sewer. They are going to take care of 
everything that costs us money, and they are going to maintain all the 
land around. All the land we give the Government, they are going to 
maintain it. It is a gift, but that is part of this transaction.
  This family keeps all this lands, all these hotels, and they make a 
lot of money. A few years ago they decided they had depreciated all 
they could, made all they wanted to out of it, and they sold it to a 
big national corporation who now owns it.
  Now, the point I am making is this: We cannot imagine the amount of 
taxes this very wealthy family did not pay because of the way they 
handled this. They did not have to give this away to children or 
grandchildren. What they did is, they gave it to the Federal Government 
and they got a tremendous tax incentive by giving it away. Now, if they 
had given this same land to their children, they would have been 
penalized.
  The point is that the wealthy in this country can get around the 
issue. They always have. The problem is the middle-class people who, 
all of a sudden, they do not know what they are worth. They may think 
their farm, because they are only making $40,000 or $30,000 a year off 
this farm, they think, well, this farm is not worth that much.
  But whenever the IRS comes in, and they appraise that land and they 
appraise that equipment and they appraise that farm at a value which is 
at current standards, all of a sudden they realize they do not have 
enough money to pay this off. They are going to wind up selling this 
farm and being put out of business, not being able to continue, and 
their family devastated.
  If their child wants to be a farmer, I am sorry, they have to start 
over again. The Federal Government is going to confiscate what they 
have spent their life working for. Now, that is unfair.
  Mr. KINGSTON. Essentially, Abraham Lincoln made this statement, 
``that God must have loved the common man because he made so many of 
them.'' Unfortunately, Uncle Sam loves the common man, too, because 
that is who pays the taxes. It is not the poor, it is not the super 
rich. They get around it through foundations, through tax shelters, 
through whatever their lawyers and accountants can scheme up, but over 
and over again the common man pays the taxes and carries the whole load 
here.
  I hear the same thing the gentleman hears. An individual's mama and 
daddy died, left an estate over $600,000, and Uncle Sam came to the 
funeral first and got his share. Big dog sat down and he ate, and after 
he ate, what was left, these folks had to sell off whatever it was 
their parents had worked all their life for. Then they cannot operate 
that farm or family business any more because they had to sell a 
portion of it to pay the taxes.
  So Uncle Sam, in his greed, cuts out a revenue generating enterprise. 
Just one more example of short-term greed and, I think, a horrible 
punitive tax policy.
  We were all raised hearing that we should learn our lessons in 
school; go to school every day, do what is right and work, get that 
job, show up on time and do what our employer tell us to do, and one 
day we will be lucky enough to own something, own a house, own a farm, 
maybe own our own business. But now, because we do that, we get an 
organized group of say 150 liberals with the President of the United 
States saying that is bad, that is evil, these people are rich.

[[Page H3912]]

  Well, we know these people are not Rockefeller rich, but they still 
have enough money that they are not dependent on the Government. 
Therefore, they are going to be punished when they are living and when 
they are dying. I think people in America have had enough.
  Mr. PARKER. You know, this is what I find fascinating. If people sit 
and do absolutely nothing, refuse to move and are as lazy as they can 
be, the government will do anything they can to help them. The 
fascinating thing is that that individual who turns around and they 
work, as the President says, they play by the rules, they save, they 
reinvest, they do everything they can to be good taxpaying citizens, at 
the end of their time, when they have done all of this work and 
accumulated something, and let me just say they did not just accumulate 
it because it fell out of the trees, they accumulated it because they 
had a plan and they worked that plan and they applied themselves to 
save, and after they do this, the Federal Government says they have 
done a great job, and what the Government is going to do is they are 
going to now penalize them.
  Now, personally, I think that is unfair. It is unfair to them, it is 
unfair to their children, and I think it sends the wrong message to the 
young people of this country who do not even realize what they are 
coming up against now. A lot of them, only 58 percent of the owners of 
small businesses even realize what their tax liability is going to be. 
Many of them do not.
  One of the reasons is not because they do not want to know, but that 
they are busy running their businesses and building their businesses. 
They do not have enough money to turn around and pay accountants and 
pay lawyers to come in and give them an expensive way in order to get 
around the taxes that they are going to be faced with. They have no 
idea of what is coming.
  Mr. KINGSTON. They do not.
  Mr. PARKER. Mr. Speaker, I yield to my friend, the gentleman from 
Kansas, [Mr. Tiahrt].

                              {time}  1615

  I think my colleagues are carrying on a very interesting debate, and 
I would like to add a little bit of a personal story that came out of 
my life that adds to why I think we ought to change our tax structure 
here in America. I know we are talking about death taxes. But you know, 
we are taxed on the very first cup of coffee we drink in the morning. 
We are taxed on every gallon of gas we use to drive to work. We are 
taxed on the telephone when we use it to earn some money. We are taxed 
on the income we earn. We pay sales tax on the way home if we stop to 
buy something, pay property tax on our home. And then when we die, we 
have to pay death taxes. And I think it is wrong, and it is wrong for a 
couple reasons.
  My colleagues talked earlier about the redistribution of wealth. I 
think we ought to reward success in America. We want more success, and 
more success means that we will have people that will have money 
available that will invest and create more jobs. And this is a good 
thing. We want more jobs and more opportunity. But also, death taxes 
prevent parents from passing on their success to the next generation.
  My grandpa was John W. Steele. He was born on a farm, and he spent 
his whole life on a farm. He had some good times and some bad times. In 
the 1920's they were very successful, and in the 1930's they lost it 
all, and in the 1940's they were struggling. And my grandpa, at the age 
of 67, I believe, borrowed enough money to buy the farm I grew up on, 
and he paid it off before he died in 1979 at the age of 94.
  At the time when he died, land prices were a little bit elevated. And 
when the tax men looked at the property, they found 40 acres, a small 
plot that was near my home, and it had sold for about $1,500 per acre. 
And so, they assessed $1,500 per acre for this 1,200 acre farm, or two-
section farm.
  What happened is that my parents, Wilbur and Marcine Tiahrt, and my 
aunt and uncle, John and Mary Ruth Armstrong, had to borrow the 
equivalent of about $750 per acre to pay off the death taxes so that 
they could have the enjoyment of the success that my grandfather and 
his brother had in their farm.
  Well, today that land is worth somewhere between $900 and $1,000 per 
acre. So not only did my grandfather and his brother borrow money and 
pay for this farm once, but my parents and my aunt and uncle have had 
to borrow and pay for that farm twice at an inflated value just to 
maintain the success that our forefathers enjoyed.
  I can understand that we have to generate revenue for this 
Government. There are many wonderful things that we do in this 
Government. But we should not penalize success. We ought to encourage 
success. This is one way that people pass from one generation to the 
next the fruit of their labor.
  So I would join with the gentleman and say that we ought to eliminate 
death tax in America.
  Mr. PARKER. If the gentleman would yield, he brings up a great point. 
Let me just say something to that.
  My land back home at my house, I have got 125 acres. Now, land is 
what it is worth on the market, it is worth what somebody is willing to 
pay for it. I have got a neighbor who bought some land close to me, and 
the point I am making is how these values are established. Now this guy 
has been successful. And I think the world of him. He is a good man. He 
established a Fortune 500 company. He has done well. But he has got 
enough money to burn, you know, to cremate a dead mule with hundred 
dollar bills. This guy has got a lot of money.
  When he bought this land, he paid $3,000 an acre for it, which is 
fine because he had the money to do it. The problem is that if I had 
dropped dead right after this sale, the IRS would have come in and 
looked at the sale that occurred down the road and said, by the way, 
Parker, they would have told my wife, this 125 acres is worth $3,000.
  Now, I got news for my colleagues. Somebody who wants to pay $3,000 
for that land, they can have it. I will be more than happy to sell it. 
That is not the point. It is not worth that on the market. But the IRS 
would have looked at that, made a determination that was the value, and 
that is what my wife would have had to evaluate that land for. Now, 
that is wrong.
  And let me point out, it is not only the Government that creates 
inflated prices. There are times when market forces create inflated 
prices. There is no reason for anybody to be caught in that situation. 
It can destroy you. I appreciate the comments of the gentleman.
  I yield to the gentleman from New York [Mr. Paxon].
  Mr. PAXON. I appreciate the gentleman from Mississippi [Mr. Parker] 
having me here today to join with him and the gentleman from Georgia 
[Mr. Kingston] and the gentleman from Kansas [Mr. Tiahrt] in talking 
about what I believe was referred to as the death tax, is the death on 
jobs and opportunity tax.
  Where I come from in western New York, the Buffalo and Rochester, NY, 
areas, our economy is built on small business and on family business. I 
come from a little village, Akron, NY, where the major employers in our 
community were all multigenerational family businesses that had been 
there since the turn of the century and before. And time and again, my 
little home town of Akron, NY, and Erie County and western New York, 
people tell me again and again that the biggest burden they face is 
trying to figure out a way to keep that business together so that the 
next generation can have an opportunity and the community can have an 
opportunity.
  I flew back from Buffalo down here a while ago with a business person 
from Buffalo who was selling, in the process of disposing of a 
multigeneration family business that been in the family for I think 
five generations, and unfortunately, because of death taxes, found it 
necessary to do that, to dispose of the business, selling it to a 
company from outside of our country.
  Eventually, I know what is going to happen, those jobs are going to 
move to another State, we are going to lose jobs in our community; and 
that is going to be terrible hardship to families. So all this effort, 
all this cost is going for what purpose? The death to jobs, 
opportunities for families. It just seems to me unconscionable.
  I know, whether it is in Georgia or Mississippi or in New York State, 
the statistics are shocking. Seventy percent of family businesses do 
not survive through the second generation,

[[Page H3913]]

and 87 percent do not make it to the third generation. And again and 
again, I know my colleagues hear the same thing when they both go home, 
most of our Members do, the key reason for that is the burdens of death 
taxes and of trying to figure out a way to keep those businesses 
together; and it is much easier to dispose of them, to bring about the 
loss of jobs and opportunity in the community, than it is to try to get 
that down to the next generation.
  We should be celebrating. I am the father of a little 1-year-old. And 
I think to myself, nobody in this country would take a 1-year-old 
child, walk him out to the corner of the street, and say, ``Go find 
your way down to Aunt Mary's house,'' and walk back in the house and 
leave that child out there.

  But that is what we do to that small business. We say to that small 
business, we really celebrate you, we love you; but find your way down 
the street. And in the meanwhile, the Government puts up every barrier 
to the growth of that small business, just as we would do to that 
child. We should celebrate those little kids and celebrate business 
starts. We should not penalize them from the day they start by saying, 
we are going to tax you to death; and when you die, we are going to 
take it back from you. It is just wrong.
  Mr. KINGSTON. If the gentleman would yield, this is a very old story 
but it is a very good story, I guess that is why it has lasted so long, 
about the guy who is driving down the road and sees a farmer who has a 
pig. The pig has two wooden legs where the ham should be and he stops 
and says to the farmer, ``I have got to ask you about that pig. I have 
never seen a pig with two wooden legs. What is going on here?''
  He said, ``Oh, let me tell you about that pig. That is a very special 
pig. About 2 years ago, my little boy was out on the pond when it was 
frozen and the ice cracked and he fell in and that pig dived right in 
and grabbed the boy by the collar, pulled him out and saved his life.'' 
And the man said, ``That is impressive.'' And the farmer said, ``Well, 
that is not all. A couple years ago, a guy was breaking into our house 
at night. We were sleeping. The guy had a gun in his hand. The pig 
leaped on him and knocked him over. And the guy ran out the door and 
ran and the police caught him. That is a special pig.''
  Then he said, ``Well, why does he have two wooden legs?'' And the 
farmer said, ``I am not quite through. I have got to tell you another 
story. Then our house caught on fire about 6 months ago. The pig ran 
in, pulled us out of bed, woke us up and saved the entire family. That 
is one special pig.''
  And the guy says to the farmer, ``Well, I still do not understand. 
Why does it have two wooden legs?'' And the farmer said, ``Well, it is 
very simple. You don't slaughter a pig like that all at once. That is a 
special pig.''
  And that is what is happening to the middle class, day in day out. We 
pay for Bosnia. I said, ``we.'' I am middle class. Middle class pays 
for Bosnia. Middle class pays for Desert Storm. Middle class pays for 
Medicare. Middle class pays for the Park Service. Middle class pays for 
Medicaid. I am saying good programs here, but it is paid for on the 
backs of the middle class. And yet year after year, the taxes are just 
creeping up and up and up.
  Today, a two-income family with a household income of $55,000 is 
paying $22,000 in taxes on an average. Which means, the second income, 
that spouse is working strictly for the Government. They may be working 
for a dry cleaners, may be working for an insurance company or bank, 
but the reality is when you are paying $22,000 in taxes on a $55,000 
income, the second income goes straight to Uncle Sam, you are working 
for the Government.
  Mr. PARKER. If the gentleman would yield, let us go beyond that. 
Because we talk about family farms. We talk about businesses. But from 
a national perspective, let us look on this thing from the standpoint 
of just exactly how does it affect a lot of people.
  A lot of people do not realize the difficulty they are going to have. 
There are different values in this country for a lot of different 
things. It is regional in nature for many things. We can take a house 
in Mississippi that we pay $100,000 for and it would be a nice home. If 
we put it in New York, we put it in Washington, DC, that house is going 
to be half a million dollars.
  Now people back home in Mississippi cannot fathom that. Conversely, 
people from Washington, DC, and New York that come down to Mississippi 
and see a house, they cannot fathom that it is only $100,000. The point 
is this: Down in Mississippi, people may have a little land with that 
house. But in New York or in Washington, DC, or San Francisco or 
Chicago, they may not have that land. But that house is valued so 
greatly that what happens is that person who owns a home who may have 
paid $40,000 for it 35, 40, 45 years ago, when they come to their time 
of death and their spouse is left with the bill on this thing, all of a 
sudden they find out, I did not know that I was going to have this 
terrible bill. I had no idea. What am I going to do? You are going to 
take the money that I was going to live the remainder of my life on. 
What am I going to do?
  The IRS says, do not worry, we will take care of you. We are going to 
let you have a payment plan over the next 10 years, and you are going 
to pay the IRS every month. IRS are kind people. They are sweet as they 
can be. But what they will do is keep food out of your mouth, make you 
sell that house, move you someplace where you do not want to move, 
change your plans where are you going to spend the last years of your 
life in a place you do not want to be, simply because you did not know 
that the increase of cost on your home would put you in that situation.
  Mr. PAXON. That is what I think the gentleman from Georgia [Mr. 
Kingston] and the gentleman from Mississippi [Mr. Parker] just 
highlighted. It is absolutely fundamental to what we are trying to do 
in the Congress.
  Our goal is to balance our Nation's budget. Like every family back at 
home has to do, like every small business has to do, this Government 
should do it. But we are going beyond that. We are finding other ways 
to save money so we can allow families back at home to keep more of 
theirs.
  As the gentleman from Georgia [Mr. Kingston] points out, that dollars 
go to the government because of taxes. Study after study has indicated 
that about 50 percent of household income in this country ends up in 
the pocket of the government at some level, about 38 percent in Federal 
and State local taxes.
  I come from New York where that number is even higher. And then you 
add in the indirect cost of everybody and the goods and services we 
buy. That means, as the gentleman points out, one income earner in 
every family has got to be working to provide the government with the 
dollars. That is just fundamentally wrong. It removes the choice from 
the families, maybe parents stay home with the child or the vacation 
they want to take or something else they want to do to enhance the 
quality of life with their children.
  No. 2, we just keep putting these burdens on and putting them on 
without any rational reason because of the money we are wasting here in 
Washington. We undermine the people's faith in government. I think it 
is time, whether it is in the form of that $500-per-child tax credit, 
whether it is rolling back the tax on investment and saving, some 
people call it capital gains. That is a tax on investment and savings, 
and also the death taxes.
  Mr. PARKER. If the gentleman would yield, this is an interesting 
thing, because I always hear the liberals talk about the capital gains 
as being a tax break for the wealthy, and I have always been fascinated 
by that.

  I turn around and look at somebody and they have worked hard all 
their life, they consider themselves middle class, and they bought a 
house in the 1950's and they are coming up close to retirement and they 
bought a house for $25,000, and they turn around and that house has 
increased in value over the last 40 years a considerable amount. And 
let us say that house is now $100,000, they have an increase of 
$75,000.
  The question is this: When you get that check for $100,000, which 
that took care of the $25,000 original investment and the $75,000 
increase, do you think the Federal Government is owed basically one-
third of that amount? Do they need to get a check for between $20,000 
and $25,000? Do they deserve that? Is it their money?
  My position is, it is not the Federal Government's money; it never 
was

[[Page H3914]]

their money; it should not be their money; and this tax should be 
changed. Whether it is on capital gains or estate tax, it is all the 
same principle. We are talking about private property rights here.
  Mr. KINGSTON. If both the gentlemen would yield, let me just ask both 
of my colleagues, quiz time: What do these countries have in common? 
Australia, Canada, Egypt, Ghana, India, Indonesia, Israel, Kuwait, New 
Zealand, Switzerland, Uruguay? What do they have in common?
  Mr. PARKER. I would hope they have no capital gains.
  Mr. KINGSTON. No death taxes.
  Mr. PAXON. Well, they are way ahead of us.
  Mr. KINGSTON. The gentleman from Erie County [Mr. Paxon], where my 
dad is from, knows well that there are a whole lot of his friends who 
are probably now working and living in Canada, a lot of people he went 
to high school with.

                              {time}  1630

  I went to school at Michigan State. A whole bunch of folks, brothers 
ended up over there for other reasons. But the reality is for people to 
move from border States in America to avoid taxes is a great one.
  Mr. PAXON. Let me just say to the gentleman, I live in a community 
that has been devastated economically over the years by the flight of 
jobs outside the country, moving outside of New York State and one 
reason, we for 20 years in New York until Governor Pataki came along 
had a policy in New York, tax everything the highest in the country. In 
addition to the Federal death taxes, the State death taxes are such 
that today when you pass away in New York State, you can almost be 
assured of the fact that your business is going to be dissipated. What 
that has meant is those jobs are gone. We go right back to what we 
started with. Families are harmed. It is the family that ends up 
getting hurt. I am tired of the politicians in Washington talking about 
class warfare, helping the rich, hurting the poor and all this about 
the rich. Who ends up getting hurt the most? It ends up being Joe and 
Mary 6-Pack out on Main Street trying to earn a living, working in a 
small business and when that business is dissipated, their jobs are 
gone. When they try to sell their house and the Government takes their 
money, that means their kids may not have an education or they may not 
be able to retire someday, or some politicians in Washington say, ``We 
don't want to give them that $500 per child tax credit because it 
doesn't mean anything,'' they forget that to Joe and Mary back home it 
may mean the difference in that kid getting a better education or 
putting food on the table.
  It is time we remember it is our constituents' money, it is not ours, 
it is not the IRS's or the Government's.
  Mr. PARKER. Let me point out something. We are talking about a 
private property issue. Private property rights is I think the 
cornerstone of our Nation. It is fundamental.
  I like liberals. I always have. I think liberals are very important, 
because they have done some important things for our Nation. They have 
brought to light certain things that we needed brought to light. But a 
lot of times their solutions, I do not care for. I think that liberals 
have a right to believe the way they want to believe. This is America. 
But one problem that I have, and we disagree strongly with this, there 
are a lot of liberals in this country who believe that all property 
belongs to the people collectively. There is no such thing as private 
property rights. When we look at things like capital gains but more 
importantly when we look at things like death taxes, it really brings 
it to the fore. People have to understand that the Federal Government 
does not own this property. They act as though they do. We as 
individual citizens have paid for this property. We have paid for this 
business out of the blood and sweat of our own bodies. The Government 
has done nothing except try to inhibit us. Because of that, the 
Government has no right to come in and say, ``We want part of that.'' I 
believe there should be absolutely no death tax. One of the purposes of 
this special order today, and there are going to be many more of these, 
is because this point is coming home to people finally. People are 
finally understanding that we must be in a position where we change the 
direction of this country. We do that by changing the fundamental tax 
structure. We are going to be talking about different items concerning 
the death tax and how it affects people and the changes that need to 
occur so that the American people will understand exactly what is going 
to happen to them. Many of them are not aware.
  Mr. KINGSTON. If the gentleman will yield, I want to make a point. I 
am sorry the gentleman from New York [Mr. Paxon] left because he has 
this 1-year-old baby. I am sure that he and the gentlewoman from New 
York [Ms. Molinari] will be fortunate enough to have other children and 
before they know it, they are going to be doing what we do in the 
Kingston household nearly every weekend, and, that is, we go down to 
the sports complex and watch one of our four children playing baseball, 
tee ball, or soccer. My wife Libby is the soccer mom. That is what we 
do. We drive station wagons, we have got two girls and two boys, and 
they are playing sports. Out there on the soccer field are tons and 
tons of other soccer moms. These are people who work real hard and they 
kind of cram all their recreation into a 48-hour period called the 
weekend. But during the week they are working hard, paying taxes, 
trying to raise their children right, working two jobs, doing homework, 
doing laundry, organizing school, PTA-type activities, volunteering at 
the hospital or the United Way and so forth. These are the people that 
this tax system is kicking in the face.
  Money Magazine this month has a great article on the profile of the 
millionaire. It says, if you think millionaires are the people who are 
living in these huge houses with brand new cars and beach or mountain 
houses or whatever, you are wrong. Most of those folks are simply in 
debt and in debt in a very, very big way. The typical millionaire, 
according to the Money Magazine survey, and it was a national survey, 
are the people who have worked in the same job 20 to 30 years, many 
school teachers, for example, they are people who own their own 
business, but not big, expensive businesses, dry cleaners, scrap metal, 
whatever, just what you would assume is maybe a modest business, if you 
will. They are folks who live under their means. They do not buy the 
house that they can afford, according to their real estate agent, they 
buy the house they feel comfortable with so they can pay it off. They 
work 60 hours a week, they work 50 hours a week, they save 15 percent 
of their income, they tend to stay married, they tend to not go on 
fancy vacations. They really have what we would call in psychology a 
dull, normal life-style. They are just regular folks. Yet those are the 
people who are paying for the whole $4.5 trillion budget that we have 
in Washington.
  Mr. PARKER. We have got a lot of people around this country when I am 
talking to them about death taxes, they sit back and go, ``That doesn't 
affect me.'' But whenever I start asking them, I say, ``Didn't you 
inherit a little bit of land from your daddy and mama?''
  ``Well, yeah, I've got 150 acres.''
  ``Do you know what the current value is?''
  They think in terms of what the value was when they inherited it. But 
inflation has changed that over a period of time. It shocks a lot of 
people out there to realize that the IRS comes in and values their 
property much more than they think their property is worth. They are 
looking at it from a realistic standpoint. The IRS looks at it from a 
fair market value and what other property has sold in the region. They 
have all these criteria.
  What happens is all of a sudden these people who turn around and say, 
``Hey, I'm not rich, I don't have that much,'' they find out whenever 
the time comes that they had more than they thought. All of a sudden 
the Federal Government is going to come in and say, ``By the way, we're 
going to take part of that.'' That is when it hits home. That is when 
all of a sudden people are in a situation that they say, ``Hey, I had 
no idea that I was going to be affected.''

  Let me point out, we spend in this body all kind of time talking 
about investment and savings. We need more investment and savings. I 
must tell the gentleman, if we reward investment and savings, we are 
going to get more of it. If we penalize it, we are going to get less of 
it.

[[Page H3915]]

  It is no wonder that we have a lot of people in this country who do 
not worry about investment and savings because some of them realize 
that whenever their time comes, after they have spent a lifetime 
working, that the Federal Government is going to come in and confiscate 
it. If that occurs, all of a sudden all they have worked for all of 
these years is null and void.
  We as a Nation have got to change that. We as a Congress have got to 
realize that the people in this country are pretty much fed up, they 
are sick and tired of being sick and tired and they are ready to make 
some changes.
  Mr. KINGSTON. Going back again to the middle class soccer moms and 
dads, one of the taxes that we Republicans are pushing is a $500 per 
child tax credit. In sophisticated boardrooms, folks do not want that. 
That is the least popular. However, that is the one that is going to 
benefit the most people. I support it for that reason.
  Number two, because it is the biggest cut in the size of the Federal 
Government. The less money middle class folks send to Washington, the 
less influence Uncle Sam is going to have on their lives and the less 
the bureaucracy in Washington is going to be able to grow.
  What is ironic is that the President of the United States now, 
instead of giving a $500 per child tax credit to working, let me repeat 
that, working middle-class taxpayers, he wants to make it a welfare 
payment to people who are not working enough to pay taxes. In other 
words, we have got the Jones family over here who is busting their 
tails working 50 or 60 hours a week, mom, 50, 60 hours a week, dad, and 
they are in line for a $500 per child tax credit, and we have got some 
other folks who are working through public assistance type programs but 
they are not paying taxes. The President wants to give them both a $500 
per child tax credit, but the difference is this group right here, they 
are paying taxes, and the other group is not paying taxes, so it is 
just a gift to them. It is an expansion of welfare even though the 
welfare rolls are decreasing.
  I know we are talking death taxes, but again it goes back to the 
overtaxation of working, middle-class Americans. The harder you have to 
work, the less time you have at home. The less time you have at home, 
the less time you have to impart information and values to your 
children.
  One thing I have learned about children, I guess two things. Number 
one, it is the hardest thing in the world to try to get them on the 
right path. I do not know what I am doing wrong. If anybody has 
suggestions, let me know. I try my best. Anybody who has been a parent 
knows the feeling.
  Number two, you have got to spend lots of time with kids trying to 
teach them right from wrong, trying to teach them the work ethic. It is 
not any fun doing homework, it is not any fun memorizing multiplication 
tables, it is not any fun waking up 7 days a week and making your bed 
and picking up laundry, but I know this, that it is all tied into the 
big picture. As a father and Libby as their mother, if we do our part, 
then they will grow up one day to be independent, independent of 
government programs and government dependency. They will be taxpayers.
  Mr. PARKER. That independence that the gentleman is talking about 
basically is getting the government out of somebody's pocketbook and 
out of their lives.
  I must tell the gentleman, some of this stuff is pretty simple to me. 
One of the reasons I support the death penalty is because I know for a 
fact that whenever that murderer is put to death, he will commit no 
more crimes. No more crimes will be committed by that individual. I 
support that.
  I also support certain things that other people look at a little odd, 
I think. I listened around here to Democrats, and Republicans, talk 
about shutting down the Federal Government. Democrats were tickled to 
death that the Republicans were blamed with the shutdown. The 
Republicans were all worried that they were getting blamed with the 
shutdown. My personal view is a little bit differently. I do not think 
the American people were that upset with the government shutting down. 
I think they were more upset that we opened it back up.
  My personal view is they would have liked to have seen the government 
shut down, and I wanted to see it shut down for longer than it was, 
simply because the American people after a few months would realize 
they do not need a lot of the things that the Federal Government says 
that we have to have in order to survive.
  I think that makes a tremendous amount of sense. Why do we have all 
these programs? Why do we have programs that are not working? Why do we 
add new programs without getting rid of the old programs? Why do we 
have over 700 programs in the Department of Education? When the 
President says that a lot of those programs are not working, instead of 
getting rid of a lot of the programs that are there, he just adds more 
on to it.
  I think it is fascinating, and the American people are getting fed up 
with this. They are finally seeing that things need to be changed. One 
thing I like about the family tax credit is it gets the government, 
maybe just $500-per-child, but it gets that $500 away from the 
government and gives it back to the family.
  Mr. KINGSTON. Per family, that is not going to make or break you 
necessarily. You are going to be able to buy some more stuff with it 
and it is going to be good, but it is going to help 11 million kids.
  Let me give the gentleman some fun facts on taxes. The Tax Code 
itself is 5.6 million words. It is 7 times longer than the Bible, 
according to the Heritage Foundation. Americans spent last year about 
$225 billion to comply with the Tax Code, and they devoted 5.4 billion 
hours to comply with it.

                              {time}  1645

  And the Tax Foundation estimates that the median two-earner family 
paid 39.4 percent of its income in taxes last year, which had increased 
from 38.1 percent in 1995. And in 1955 the median two-income family 
just paid 27. 7 percent of income taxes. That is 10.7 percent less than 
what that same family paid in 1996.
  Those are real numbers, and I will be happy to share those with 
anybody who wants.
  Mr. PARKER. I thank the gentleman.
  I yield now to the gentleman from Ohio [Mr. Boehner].
  Mr. BOEHNER. Well, I like to thank my colleague for yielding and 
certainly want to congratulate the gentleman from Mississippi [Mr. 
Parker] and the gentleman from Georgia [Mr. Kingston] and others who 
have been to the floor this afternoon talking about the issue of taxes.
  As the gentleman from Georgia just pointed out, the American people 
are paying more in taxes to all levels of government than at any time 
in the history of our country, and when we look at the middle class and 
the fact that wages are not growing as fast as we like, all we have to 
do is to begin to look at why this crunch is occurring to American 
families, and it is as a result of taxes, higher taxes at the Federal 
level, State level, local level that are continuing to take more of 
their hard earned paychecks.
  I am proud of the fact that for the first time in 16 years this 
Congress is going to pass a plan that will cut taxes for middle-income 
Americans.
  We are hearing an awful lot of demagoguery and noise coming from the 
White House and others that this plan only helps the rich, and it is 
just not true. Nine-three percent of the taxes that will be reduced in 
this plan are for people who make under $100,000 a year. Nine-three 
percent of the tax package goes to those people. As a matter of fact, 
72 percent of the tax package goes to families that make between 
$20,000 a year and $70,000 a year.
  So if you look at this package in terms of the focus and where the 
savings are going, they are going to American families who pay the bulk 
of our taxes.
  Yes, the wealthy pay their share of taxes in America. But when you 
look at the numbers of people in America, most people find themselves 
in the middle class, and they are the ones that pay the big bulk of the 
taxes to this Government.
  And I just want to come down to say I congratulate Mr. Parker and Mr. 
Kingston and those that have been here before for standing here on the 
floor today and outlining to the American people just how important 
this tax package is.
  Mr. PARKER. I thank the gentleman from Ohio [Mr. Boehner]. We do not

[[Page H3916]]

have but just a few minutes left, and I want to personally thank 
everyone that has been involved in the special order.
  We are going to have special orders on this issue over the next few 
months, weeks and months, to familiarize the people of this country 
with what is going on. Now I realize that it is very true that you can 
save a lot of money to pay the taxes, or you can have insurance, or you 
can do different types of financial planning. But I want people to 
consider this one thing:
  When you are preparing for death taxes, the average family business 
or farm spends nearly $20,000 in legal fees, $11,900 for accounting 
fees and $11,200 for other advisers. The typical small business owner 
normally makes around $40,000 a year.
  Now I have got one question. Who among us who makes $40,000 a year 
can afford to meet the staggering burden of a death tax?
  Now to me the clear solution is this: We should eliminate the death 
tax. It is an unfair tax. It is a tax that puts burdens on people when 
they do not need any more burden. It also creates an environment where 
people no longer want to save, they no longer want to work, there is no 
reason for them to, and we are not giving them an incentive. And we 
create an environment that hurts our economy, and hurts our small 
businesses and small farms all around this Nation.
  People need to realize the effect it is going to have, and I am 
looking forward to the liberals in this body coming to the floor, 
justifying the death tax. I want to see them stand and tell the 
American people and our colleagues why we should confiscate property, 
why we should confiscate money from individuals when they die, and 
spread it around and hurt people for doing what we ask people to do 
every day, and that is to work hard, to save, to take care of their 
families, to create jobs, to build their business, to make life better 
for their fellow man and their community. I want to see people come and 
defend that, the whole idea of death taxes.
  Mr. Speaker, I think when that occurs, we will see the American 
people understand what position and what side they should be on, and I 
am looking forward to this debate over and over again until we get 
total repeal of the death tax.

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