[Congressional Record Volume 143, Number 104 (Tuesday, July 22, 1997)]
[Extensions of Remarks]
[Page E1466]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       ``END THE DEATH TAX NOW!''

                                 ______
                                 

                        HON. DONALD A. MANZULLO

                              of illinois

                    in the house of representatives

                         Tuesday, July 22, 1997

  Mr. MANZULLO. Mr. Speaker, as the chairman of the Small business 
Subcommittee on Taxes, Business Opportunities and Exports, and as a 
private individual, there is nothing more inconsistent and unfair than 
estate taxes, better known as death taxes. This is the last opportunity 
the Government has to say thanks for a job well done. What you have 
accumulated at death is after a lifetime of paying electricity, sewer, 
water, gasoline, sales, real estate, mortgage, and deed filing, capital 
gains, excise, State and Federal income, and in some cases, death taxes 
when one or both of your parents die.


                           Are We There Yet?

  My kids made up a game to play when we drive back and forth to 
Washington. It's called, Name That Tax. Have you ever tried to 
entertain three little kids in a mini van? It beats, Are we there yet? 
What happens when you get married, you get--that's right--a marriage 
tax. This is not the cost of the wedding, which is not about a ticket 
tax? Got that. What about a toll tax? Yes, we have that also. What 
about gas tax? Yes, President Clinton raised that by 4.3 cents to pay 
for more welfare spending--he calls it deficit reduction--the 
Government gets fatter while you get slimmer. And what happens when you 
make a phone call? Yes, the long-distance tax, the short-distance tax. 
If you put a string between two tin cans for primitive communications, 
you have to pay tax on string. If you stop at a grocery and make 
sandwiches, most States have a lower sales tax on grocery items, but if 
you are in a hurry you pay a travelers's tax at the local McDonalds. 
But you dare not phone ahead to another cell area, because you'll get 
hit with a roving tax.
  The death tax is the Federal Government's last chance at leveling 
your income and spreading the wealth--socialism. As an attorney, before 
I was elected, I had to tell a farm family that half their land had to 
be sold to pay for death taxes: that's a tough sell when it takes $1 
million worth of assets to make $30,000 a year. And it had to be paid 
within 9 months.


                           some relief coming

  Each year I have been a Member of Congress I have cosponsored 
legislation to outlaw this tax. Now, under Republican leadership in 
this tax by nearly doubling the exemption to $1.2 million, even more 
for farms and small businesses. If we had a Republican President, 
perhaps the entire estate tax could be eliminated.
  Writing in the June 30, 1997, edition of ``FarmWeek,'' Ross Korves, 
an economist for the American Farm Bureau Federation, cites some very 
interesting facts. In spite of the annual $17 billion in death tax 
revenues, this drive to collect 1 percent of the annual taxes paid to 
the Federal Government comes from a general dislike for people who have 
wealth. And, he states, ``a tax on savings and investing will quite 
logically result in less saving and investing. Less saving and 
investing leads to a slower growing economy, fewer increases in 
productivity, and a slower rise in the growth of the standard of 
living.'' A Tax Foundation report compared the disincentive effects of 
the estate tax and of the income tax. The foundation calculated how 
high the top income tax rate would have to be to have the same 
disincentive effect as the current estate tax system. Get this: the 
study showed the estate tax has roughly the same effect on 
entrepreneurial incentives as a doubling of the income tax.
  And in 1993, Fiscal Associates, Inc., estimated that if the estate 
tax had ended in 1993, by the year 2000 the effects of ending the 
estate tax would be reflected in economic output with an economy about 
$79 billion larger, an increase of 228,000 jobs, and a total capital in 
the economy of about $640 billion larger. Korves quotes B. Douglas 
Bernheim of Stanford University, who wrote 10 years ago in a 
publication called, ``Does the Estate Tax Raise Revenue?'' Bernheim 
says no. Korves agrees:

       Stronger economic growth would help offset the loss of 
     direct revenue resulting from repealing the estate tax. The 
     increased revenue from economic growth and the revenue losses 
     from estate tax avoidance outlined by Bernheim are definitely 
     larger than the current direct revenue from the estate tax. 
     Eliminating the estate tax is likely to result in more 
     revenue to the federal government than the current tax 
     system.

  Hey, what about fairness? I visited a farm family a few weeks ago. 
The wife had inherited the farm from her parents. When her dad died 20 
years ago, the family had to pay death taxes. The mother died a few 
months ago, and death taxes again have to be paid. The goal is to pass 
the farm on to the three children, each of whom works full time on the 
farm and has a full time job in the city.
  I read an article by a university professor on why she thought death 
taxes were appropriate. After her various spread the wealth and social 
responsibility arguments, I concluded that we should impose death taxes 
only on those people who think death taxes are appropriate. What's more 
annoying is we pay taxes for higher education and use our precious 
after-tax dollars to send our kids to college so they can hear this 
professor. Then they become Congressmen who believe taking everybody's 
money is real justice, and that is the reason the death tax is not 
repealed.

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