[Congressional Record Volume 144, Number 61 (Thursday, May 14, 1998)]
[Extensions of Remarks]
[Page E859]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       INTRODUCTION OF THE ESTATE AND GIFT TAX RATE REDUCTION ACT

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                           HON. JENNIFER DUNN

                             of washington

                    in the house of representatives

                         Thursday, May 14, 1998

  Ms. DUNN. Mr. Speaker, it's been said that only with our government 
are you given a ``certificate at birth, a license at marriage and a 
bill at death.'' Today I am introducing the Estate and Gift Tax Rate 
Reduction Act which seeks to phase-down the onerous death tax. Each 
death tax rate will be reduced by five percentage points every year, 
until the highest rate bracket--55%--reaches zero in 2009. As these 
rates are lowered to zero, more and more families will no longer be 
forced to give the family savings to Uncle Sam and the family business 
will be saved.
  One of the most compelling aspects of the American dream is to make 
life better for your children and loved ones. Yet, the current tax 
treatment of individuals and families and families at death is so 
onerous that when one dies, their children are many times forced to 
sell and turn over more than half of their inheritance just to pay the 
taxes. It takes place at an agonizing time for the family; when 
families should be grieving for a loved one, with friends and 
relatives, rather than spending painful hours with lawyers and 
bureaucrats.
  By confiscating between 37% and 55%, the estate tax punishes life-
long habits of savings, discourages entrepreneurship and capital 
formation, penalizes families, and has an enormous negative effect on 
other tax revenues. Americans today are living longer and enjoying 
their retirement. At a time when this Congress is discussing the future 
of Social Security, and how to personalize and modernize the system, we 
also need to encourage private investment. We should be encouraging 
people to plan for their future with retirement plans and IRAs, rather 
than encouraging reckless spending and a me-first attitude. This 
country was born on the promise of hope and opportunity, and by taxing 
families and businesses at their most agonizing time, we destroy their 
hope for the future.
  By today's tax system, it is easier and cheaper to sell a business 
before death rather than try to pass it on after. More than 70% of 
family business and farms do not survive through the second generation. 
9 out of 10 successors whose family-owned businesses failed within 
three years of the principal owner's death said trouble paying estate 
taxes contributed to the company's demise. For family owned business, 
this is a tax just because the business is changing ownership due to 
the death of an owner.
  Aside from being a source of revenue, another express purpose of the 
estate tax was to break up large concentrations of wealth. 75 years 
later, however, reality suggests that rather than being an important 
means for promoting equal economic opportunity, the estate tax is in 
fact a barrier to economic advancement for people of all economic 
circumstances. It unduly burdens individual sacrifice to gain savings 
and investment, compared with consumptive uses of income. It impedes 
the upward mobility of labor by stifling productivity, wage growth, and 
employment opportunities. In effect, the death tax, which was 
established to redistribute wealth, hurts those it was meant to help--
namely, America's working men and women. When small businesses close 
their doors, loyal employees lose their jobs.
  The saying goes that death and taxes are the only certainties in 
life. I believe it is ridiculous that the government force the American 
people to deal with both on the same day. Families should be allowed--
and encouraged--to save for future generations. I invite my colleagues 
to join John Tanner and me in our bi-partisan effort to reduce this 
detrimental and cruel tax.

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