[Congressional Record Volume 143, Number 93 (Friday, June 27, 1997)]
[Senate]
[Page S6720]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE TAXPAYER RELIEF ACT OF 1997

  Ms. COLLINS. Mr. President, I rise today to commend the members of 
the Senate Finance Committee, ably led by chairman Roth and ranking 
member Moynihan, for their willingness to work in a bipartisan fashion 
to bring meaningful and much-needed tax relief to the American people.
  The Taxpayer Relief Act of 1997 is extremely important legislation. 
While it makes many significant changes, I want to focus my remarks on 
the provisions that will provide long-overdue estate tax relief for 
family-owned businesses and farms and on those that will help lower- 
and moderate-income families put their children through college.
  The first bill I sponsored as a U.S. Senator was targeted death tax 
relief for family-owned businesses and farms. This was no accident, for 
I firmly believe that small, family-owned enterprises hold the key to 
our economic future. It is these family businesses that will create 
two-thirds of all new jobs for the people of the United States in the 
21st century.
  Regrettably, our current tax code penalizes family-owned businesses 
by making it difficult, if not impossible in some cases, for families 
to pass the business down from generation to generation. In fact, fewer 
than one-third of all family-owned businesses survive the transition 
from the first generation to the second.
  Our tax policy should produce the very opposite result, and I am 
gratified that a strong, bipartisan majority of the Senate Finance 
Committee recognized this problem and supported action to put us on the 
right track. Specifically, S. 949 establishes a $1 million exemption 
from Federal estate taxes for closely-held family businesses, thereby 
making it easier for parents to pass their business along to their 
children. My estate tax relief bill, S. 482, contained the very same 
provision, and I commend the Finance Committee for including it in 
their legislation which we just passed.
  The Finance Committee's proposal will help to make real the dreams of 
those Americans who work long hours to build a business so they can 
turn it over to their children. It will help individuals like the 
potato bag manufacturer in northern Maine who would expand his business 
and hire more new employees were it not for the money he has to invest 
in estate planning and insurance. And it will help the small 
businesswoman in Portland, ME, who wishes to leave her restaurant to 
her son and avoid the problem she faced when her father died and the 
family had to sell 24 of their 25 restaurants to pay the estate tax 
bill.
  Mr. President, by preserving family-owned enterprises, we not only 
strengthen American businesses, we also strengthen American families.
  Mr. President, I also want to commend the Finance Committee for 
including several very important provisions that will help lower- and 
middle-income families finance college educations for their children. 
Many of the provisions are similar to those in my legislation, the 
College Access and Affordability Act of 1997.
  For the last 30 years, the Federal Government has helped make post-
secondary education available to millions of high school students, 
thereby giving them a chance to fulfill their potential to the greatest 
extent possible. The primary vehicles for this invaluable Federal 
assistance to lower-income and middle-income families have been the 
Pell grant and student loan programs, both of which I wholeheartedly 
support.
  But our student aid programs have had the unintended consequence of 
punishing those families who struggle to save for their children's 
education and then become ineligible for Federal assistance because of 
their savings. To its credit, the Finance Committee recognized that 
with the greatly increased cost of a college education, these families 
also are deserving of help, and it took several important steps in that 
direction.
  First, the bill that we just passed also establishes education 
investment accounts to help families save for their children's college 
education. Under this plan, families can contribute up to $2,000 a year 
to a special savings account and not have to pay taxes on the account's 
earnings if they use the money for qualified educational expanses, such 
as room, board, and tuition. Along similar lines, the Finance Committee 
approved a proposal that allows families who have created Individual 
Retirement Accounts [IRA's] to withdraw funds for post-secondary and 
graduate education without penalty.
  Second, the Committee's bill allows annual dedications of up to 
$2,500 for interest paid on student loans. This will help to soften the 
financial burden on students like the young woman in my State who 
recently graduated from college with $18,000 in debt and who returned 
to her home town in rural Maine where high-paying jobs are simply not 
available.
  Finally, the Committee adopted a permanent extension of the section 
127 program, which allows employees who receive up to $5,250 in 
employer-provided tuition assistance to exclude this assistance from 
their taxable income. We live in times of rapid change when workers may 
often need new skills to remain employable, and the section 127 program 
can be the key to making this possible.
  Taken together, these proposals represent a major step forward in our 
efforts to help lower-income and middle-income families finance higher 
education for themselves and their children. These changes will benefit 
not only our students but also our Nation, for a better educated 
population will be better able to compete in our global economy. By 
making education more affordable for all, we also reaffirm that America 
is the country of opportunity, where success is there for all who are 
willing to work for it.
  Mr. President, let me conclude my remarks with the observation that 
S. 949 is notable not only for what it provides but also for how it was 
produced. Led by their Chair, the members of the Taxation Committee put 
aside partisan concerns and crafted a bill which can command widespread 
support both in Congress and in the country. Despite the rhetoric of 
those bent on sowing the seeds of division, the legislation benefits 
all Americans, as reflected in the fact that a family of four earning 
$30,000 will receive a 53 percent tax cut under the plan.
  Mr. President, the people of my State want results and not rhetoric, 
cooperation and not confrontation. The Family Tax Relief Act of 1997 
shows what we can accomplish when we honor the wishes of those who sent 
us here.
  Mr. BUMPERS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Arkansas.

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