[Congressional Record Volume 144, Number 67 (Friday, May 22, 1998)]
[Extensions of Remarks]
[Pages E974-E975]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            DEATH TAX REPEAL

                                 ______
                                 

                     HON. GEORGE R. NETHERCUTT, JR.

                             of washington

                    in the house of representatives

                          Friday, May 22, 1998

  Mr. NETHERCUTT. Mr. Speaker, the death tax is one of the most 
egregious forms of taxation. Frank A. Blethen, publisher of The Seattle 
Times, gave a compelling speech on May 14, 1998, on this subject at the 
Family & Independent Owners Conference in Washington, D.C. I rise today 
to bring the attention of all Members to Mr. Blethen's remarks, a 
summary of which follow. After hearing his comments, I urge all Members 
to support repeal of the death tax.
  If repeal of a specific tax would actually decrease the federal 
budget deficit, wouldn't you think such repeal would be a non-partisan 
Congressional and White House priority? If repeal that tax would result 
in saving our country's family-owned businesses, including most 
minority and female owned businesses, wouldn't you think that such 
repeal would be the highest priority of every state's Congressional 
delegation, and every local community's Chamber of Commerce? If 
Congress had an easy way to create jobs, stimulate the economy and to 
be the champion of families, wouldn't you think they would jump at the 
chance? And, if in addition to job growth, the repeal of this tax 
stimulated other actions that our nation covets like long-term business 
investment, philanthropy, and saving money, wouldn't you think Congress 
would jump at the opportunity?
  Repeal would turn one of our country's most harmful public policies 
into a powerful positive public policy overnight. So why isn't Congress 
jumping at the opportunity? Simply put, too few people understand, or 
appreciate, the negative economic impact of the Federal Estate Tax. And 
too few people understand the substantial economic and public benefit, 
which would come from repeal. Most people, including many family 
businesses still misperceive the tax as a ``benefit for wealthy 
people'' rather than the small and business public policy issue, which 
it is. Once one examines the facts, it is easy to see that this tax is 
very poor public policy because it destroys jobs, minority-owned and 
small businesses.
  Once politicians understand the devastating negative impact of the 
death tax on today's economy and on America's families, their 
perceptions will change. Smart politicians in both parties will 
position themselves as champions of families, family businesses and 
minority businesses. They will stimulate jobs and investment in our 
local communities while reducing the federal deficit.
  We need to create a new, accurate perception, that the death tax is, 
in fact, a very serious broad-based family and middle class issue as 
well as an economic and jobs issue. We need to educate people that this 
tax destroys family businesses, minority owned businesses, jobs, 
investment, and doesn't even contribute to the federal budget. We need 
to eliminate the perception that the death tax is a rich person's 
issue. Everyone has many opportunities to combine education with a 
grass roots effort.
  Death tax repeal will not negatively impact Federal budget revenue. 
The estate tax generates only 1% of the Federal budget (approx.

[[Page E975]]

$16 billion). 65% of that so-called contribution is spent on compliance 
and enforcement. Consequently, less than \1/3\ of 1% of the Federal 
budget revenue comes from this tax (approx. $5 billion).
  Repeal would dramatically help the economy and would reduce the 
Federal budget deficit. According to several studies at least 145,000 
new jobs would be created in the first year of repeal, personal income 
would rise $8 billion annually, family businesses would stay in 
business, job preservation would be enhanced, and long-term investment 
would be enhanced. Plant and infrastructure investment would be 
enhanced and the trend in most industries towards consolidation would 
be reversed. Philanthropic giving would go up, minority-owned business 
would be preserved, female-owned business would be preserved, business 
innovation, and creativity would be stimulated, and savings would 
increase.
  Primarily because of the death tax 70% of family business don't 
survive the first generation, 87% don't survive the second generation, 
less than 5% survive the third generation, and this misguided tax is 
the primary reason for the inability of minority owned businesses to 
perpetuate themselves.
  The burden of this public policy now falls on the middle class. When 
workers are laid-off and family businesses fail, the negative trend 
towards a two-tier society is accelerated--encouraging corporate 
takeovers and the consolidation of industries. This leads to workplaces 
characterized by layoffs, job reduction and disinvestment.
  The death tax started early in the 20th century targeted at a few 
super rich families. Most people still believe this is a ``soak the 
rich'' law and that repeal would only benefit the rich. Most Americans 
are appalled that the death tax rate is 55% and that everything it 
applies to has already been taxed at least once.
  What can you do? Educate yourself. Contact and lobby your Congress 
person and Senator. Identify and work with key Congressional staffers. 
Lobby the Senate Finance Committee and the House Ways & Means 
Committee. work with your local chamber and the U.S. Chamber, as well 
as any other business association you have a relationship with. Inform 
other industry groups. Contact and educate other family business 
owners. Use and promote the use of the free print ads we have developed 
at the Seattle Times. Use and promote the death tax web site 
(deathtax.com)
  [The Seattle Times was found in 1896 by Alden J. Blethen. The 
newspaper is currently owned and operated by 4th and 5th generation 
family members. Six members of the Blethen family are employed full-
time, three of whom are long-term members of senior management; another 
family member is actively involved in governance; and four more are 
employed during the summer. The Seattle Times is the largest evening 
newspaper left in the country. It is one of a handful of locally owned, 
family-owned metropolitan newspapers left in America. The Times and 
Blethen family are committed to perpetuating local, family ownership in 
spite of the overwhelming pressures to sell to large, public, foreign 
owned newspaper chains and despite personal and corporate resources 
that are drained away from the business and the community to deal with 
the estate tax. Individual family members have foregone significant 
personal wealth to continue family, local ownership. Fourth generation 
deeply involved with estate planning since 1975.]

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