[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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