Congressional Record, Volume 146 Issue 70 (Thursday, June 8, 2000)

[Congressional Record Volume 146, Number 70 (Thursday, June 8, 2000)]
[House]
[Pages H4109-H4115]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

NIGHTSIDE CHAT

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 1999, the gentleman from Colorado (Mr. McInnis) is
recognized for 60 minutes as the designee of the majority leader.
Mr. McINNIS. Mr. Speaker, once again we are here for a nightside
chat. It is very interesting. I just had the opportunity to hear the
gentleman from California (Mr. Sherman) speak about the death tax. What
I was surprised about is he actually got some applause as he concluded
his remarks.
I want to talk about his remarks on the death tax. This is a
supporter of the death tax in this country. I want to specifically go
through the impacts, the negative impacts that this tax called the
death tax has on our country.
I want to point out very clearly, Mr. Speaker, that the current
administration, the Democrats, have not only proposed not to cut the
estate tax but, in fact, in the administration budget, and I would urge
my colleagues from the State of California to look in the
administration's budget, and they will find out that there is not a
freeze on the death tax; that, in fact, the administration proposes a
$9.5 billion increase in the death tax. I say come on to my colleagues
from the Democratic side who are supporting this death tax. Be
straightforward. Be up front. Talk about that administration budget.
Talk about the administration policy.
They want to increase the death tax on the American people. They do
not want to freeze it. They do not want to cut it. Let us talk about
facts here this evening. Let us address it.
Today, very interesting, I read the Wall Street Journal. I tell my
colleagues, I am an avid reader of the Wall Street Journal. I think
they have excellent articles. I also read articles written, and I have
it here to my left taped on this platform, an article by Albert R.
Hunt. I thought this evening would be a good opportunity for us to go
over a few points made in his article, because I think his article is
full of inaccuracies.
I am afraid that the gentleman, Mr. Hunt, who wrote this article has
not been to rural America. I am afraid that he simplifies, is even
disingenuous in his comments towards those of us in rural America who
are impacted by death taxes.
Now, before we start our conversation, Mr. Speaker, let us just
remind ourselves what are the death taxes. Death taxes are a tax
imposed upon one's estate, actually upon one's death. One has about 9
months to pay them. They are taxes, in many cases, on property that one
already has paid taxes upon. In other words, during one's lifetime, for
example, a rancher, a farmer, a small business, one begins to work the
American dream, one begins to accumulate some assets.
It does not take much anymore to get to $675,000 if one owns some
land, for example, in Colorado or if one owns a small business and one
has benefited from the growth in this economy.
What the Government says is, despite the fact one has paid taxes all
one's life on most of this property that one has now accumulated, with
the exception of some IRAs, despite the fact that one has paid taxes
one's entire life, we the Government, we Uncle Sam are going to come to
one's estate and, upon one's death, we are going to tax one again, as
if the Government has not gotten enough.
Well, let me tell my colleagues it has been oversimplified by the
previous speaker, the gentleman from California (Mr. Sherman). He makes
it sound as if it is the very wealthiest people in this country and all
we are doing is asking him to dig out some pocket change and throw it
out on the table so that the Government can be satisfied and take its
take and walk away. That is not what is happening out there.
I am disappointed the gentleman from California (Mr. Sherman) has
left the Chamber because I wish he were here so he could hear firsthand
what that does to the small business people, what it does to the
ranchers and the farmers, and what it does to the people in Colorado
and throughout this Nation who are advocating open space instead of
condominiums.
It is time, Mr. Speaker, to wake up to what this death tax is doing:
number one, what that impact is, and, number two, what is important is
the principle. Where is the justification to go to somebody who has
succeeded in the American dream, who understands American free
enterprise, who has been successful with American free enterprise, who
wants to pass something on to the next generation. Where is the
principle of justification in going to that family's estate and saying
to them, hey, we are Uncle Sam, and we have not had enough. We want to
tax you just a little more. By the way, a little more could go clear up
to 55 percent of your estate.
I am going to give my colleagues a specific example here a little
later on of how it impacted, not only the estate, but how it impacted
the family of a successful individual who recognized the American dream
who started out with nothing, and probably most important, and, again,
I wish the gentleman from California (Mr. Sherman) were here on the
floor, how it impacted the entire community.
My colleagues want to talk about charitable giving to churches, well,
stay tuned for my example of what happens when the Government comes in
and taxes property that has already been taxed, in many cases not only
once, twice, or three times.

{time} 2115

Let me turn now for a moment to this article by Mr. Hunt. Let us kind
of go through the article. Of course, in the first paragraph Mr. Hunt
compares what the House Republicans are doing. I am glad that he has
made it very clear that, in fact, it is the Republicans who have taken
the lead on eliminating this tax, the death tax. Ironically, in the
last couple of days, the Democratic leadership has jumped up and all of
a sudden exhibited a great deal of interest in also trying to get rid
of the estate tax at the same time apparently some of the troops have
been directed to come out here and talk about how abusive it is. And,
of course, Mr. Hunt plays right into their hands.

[[Page H4110]]

Let us go over this article. Mr. Hunt. ``House Republicans, with the
help of some accommodating Democrats,'' as if it is wrong for a
Democrat to support doing away with the death tax, ``wants to give $50
billion to Steve Forbes and Bill Gates.'' Of course, Mr. Hunt is going
to talk about the Steve Forbes and the Bill Gates kind of people. How
interesting in that paragraph he does not talk about the ranchers, he
does not talk about the open space matters, he does not talk about the
small businesses. Mr. Hunt does not talk about the American dream. All
Mr. Hunt talks about is $50 billion.
We are getting this money from a tax that, in my opinion, is not
justified; a tax that is the most punitive tax we have in our system,
punitive meaning punishing tax. It is there for one purpose, it is
there as a shot based on a person's wealth. It is there penalizing
someone who has become successful. That is the only reason that tax is
in place. Yet Mr. Hunt's concern, as expressed in this article, is not
whether or not it is justified in principle, Mr. Hunt's point is that
we are losing $50 billion. So whether it is right or not, we cannot
afford to lose the $50 billion.
How interesting that Mr. Hunt in his article does not mention that
the administration proposes this year to increase the death tax by $9.5
billion. Is that fair? What we were hoping for, until George Bush takes
office, which I hope occurs, and the reason I mention this is because
George W. Bush has committed to eliminating the death tax, but until
that happens, I was in hopes at least the Democratic leadership would
stay neutral on this estate tax. It was too much to expect the
Democratic administration would actually support us in a reduction of
the estate tax, but they caught me off guard because I did not expect
the Democratic administration to propose this year in the
administration's budget a $9.5 billion increase on the death tax.
Let us go a little further. I just mentioned that Bush advocates the
repeal. Here they talk about diminished support for churches. If we do
not tax the rich people, so-called, as they quote it, if we do not tax
the rich people in this country the churches are going to suffer. Now,
boy, is that an example. The churches are going to suffer. I am going
to go through an example and show my colleagues how the estate tax made
a church suffer; how an entire community in small town America
suffered. Not Bill Gates' community, not Steve Forbes' community. And,
by the way, he names two Republicans. Let us talk about some Democrats.
Not the Kennedys, none of these big families' communities, but small
town America. Let us talk about small town America tonight and what
this estate tax does to small town America.
It is interesting that the gentleman who spoke said that this bill is
wrong because it does not give tax relief to working families. That is
what the gentleman from California just told all of us, my colleagues,
that this bill to reduce the estate tax does not give a tax break to
working families. In other words, the gentleman's assumption, as he
spoke, and I am not sure if it was his intent, but as the gentleman
spoke his comments were that if an individual happened to accumulate
more than $675,000 either in a small business or some lands or some
other type of success, that individual apparently is not a working
member of our society; that somehow that money just fell out of the sky
and that the government is entitled to come to that individual's
family, to that person's survivors, and tax them. Where is the equity
of that?
Let us go a little further in this article. Mr. Hunt says, with
regard to this estate tax, ``these arguments are Trojan horses. The
pressure for repeal comes from wealthy campaign contributors rather
than the average voters.'' Mr. Hunt needs to come with myself or some
of my colleagues out to rural America. He needs to step out there and
let us show him these wealthy contributors, these families, these small
ranchers, these farmers.
All of my colleagues know that the very wealthy, the Bill Gateses and
the Steve Forbeses have an entire floor of attorneys to advise them on
how to escape that estate tax. They can afford it. They have the
expertise to minimize the tax. The people that do not have that kind of
money are people like my in-laws. They are ranchers. They have been on
the same ranch since 1860, somewhere in that time period. A hundred-
some years they have been on that ranch, I would say to Mr. Hunt and to
my colleagues.

We should not underestimate the American dream and what it meant to
my wife's descendants, what it meant to those people in her family who
came over to this country for the American dream. Yet the gentleman
from California says they must not be working members of our society
because they have accumulated wealth to the extent that the government
can tax it. Wealth, for example in my in-laws' family, is not cash, it
is the land they live on. It is the land they have ranched on for over
100-some years. It is the land they live for. It is the house where my
father-in-law was born and where his father was born. It is the
community where my wife was born.
Maybe some of these people who think this estate tax, one, is fair
and, two, is only for the wealthy should spend a weekend with me in
Colorado. I will show my colleagues some of these people that are being
impacted.
Let us talk a little further about this article. He says it is
disingenuous, for example, to talk about farms and small businesses.
After all, he says, they are fewer than 5 percent of all taxable
estates. I do not give a darn if a small family farm or a small family
ranch is only 1 percent of the taxable estates. We have a fiduciary
duty as representatives of the citizens of this country to be fair. And
how can we be fair if we go to even 1 percent of the small ranches and
farms in this country and say to them that even though they have worked
their land, even though they have tried to save it so that their farm
or their ranch can be passed on to the next generation, that because
they only represent 1 percent, we are going to nail them to the wall.
We are going to come and tax them on land that they have already been
taxed on.
My gosh, I wish my colleagues could see what my in-laws went through
to save their pennies, to sell their cows so that they could buy the
land and have a ranch to pass on to the next generation. And now, of
all the things that their descendants could ever have imagined back in
the 1860s or the 1800s, when my in-laws' grandfathers and grandmothers
came to this country, of all the things that would destroy their dream,
I am sure they never thought it would be the government; that upon
their death they would have a new tax called the death tax.
And let me tell my colleagues, the purpose, the real reason the death
tax was put in place was jealousy. It was put in as a punitive measure
against some of the tycoons of the early 1900s, the Carnegies, the
Rockefellers, and people like that. Our forefathers never envisioned,
when they drafted our constitution, they never envisioned when they
settled this country that the government would, upon a person's death,
punish that person's family by taking the valuable assets that had been
accumulated, whether or not they amounted to a whole bunch.
Let us go a little further in this article and talk about what it
does here. It talks about, well, the Democrats, the top Democrat tax
writer, for example, will offer an alternative that will lower rates,
and somehow this is the magical thing. Let me say, before we talk about
lowering rates, let us address the issue of whether or not this tax is
justified. If we have a tax in place and we come to the conclusion that
the tax is not fair, we should not care about whether or not it is
producing revenue, we should care about is it fair to the people that
we represent.
This country is a country based on the principle of fairness, based
on justice, and is it just and is it fair to impose a tax on the
American people even if it is only 1 percent of the American people; a
tax that serves as a punishment and not as a legitimate taxing purpose?
That is exactly what we have with the death tax.

Now, I referred earlier in my comments about giving an example of the
American dream and how the American dream was crushed. It is not about
a Bill Gates, it is not about a Kennedy, it is not about a Steve
Forbes, it is not about any wealthy family in America. It is about
small town America. It is about a small town in the State of Colorado.
It is about a small town that has churches and schools. It is a small
town that has a lot of community

[[Page H4111]]

unity in it. Let me tell my colleagues what happened in that small
town.
A young man, many, many years ago, came to this small town in
Colorado with big dreams. He started working in a construction company
with a shovel in his hand. The gentleman's name was Joe. Joe went out
and he dug ditches. He worked 10 hours a day, 12 hours a day, 14 hours
a day, because all he wanted was to gain a little foothold on the
American dream. He wanted to go out and have the opportunity, if he
worked harder, if he thought smarter, to be successful for himself and
for his family. That, after all, is how he was brought up. Those were
the principles of America: Go out and enjoy capitalism, go out and
enjoy the American free enterprise.
So that is what Joe did. He started in this small community digging
ditches. Pretty soon he got promoted to be the bookkeeper of this
construction company, and later on, several years later, he had an
opportunity, on an installment basis, making payments out of his check
every month, at the same time trying to support his young family, to
buy into the business. Now, colleagues, he did not inherit any money.
He did not come into this with a bag full of money. He came into it
with a bag full of energy, with a bag full of dedication, with the
American dream that maybe he could own a part of this construction
company.
Now, Joe's family, his wife and his two boys, although his boys were
very, very young at the time, they shared in the sacrifice. They did
not get the extra privileges of life, because papa was out there taking
every penny he could to make his payment to have a little shot at
ownership of the construction company.
Well, that ownership began to pay off after years. And during those
years that the amount of money coming back from the construction
company began to exceed the money invested in the construction company,
in other words, the profits from his investment, he paid his taxes.
Never once in his life did Joe evade taxes. Never once in his life did
the government have to come to Joe and tell him that he had not paid
his taxes; that he had tried to cheat the American people; that he was
not carrying his fair share because he was trying to get out of his
taxes. It never happened once with Joe.

{time} 2130

Joe is one of the most patriotic men I ever met. And so as he began
to make profits, the first thing he did was pay his taxes. And then do
you know what he did? He took money, and he put it back into the
business. The more money he put back into the business, the more people
in this small community he gave jobs to.
Then some of the money he took home he put in the local bank. And the
money that he put in the local bank grew the bank, and pretty soon the
bank was able to make more loans to people with the American dream in
this small town of Colorado. This money was circulating in the
community. It was not transferred to the Government in Washington, DC,
except for the legitimate taxes.
What else did he do? And I hope my colleague from the State of
California is listening to this. He supported the local church. In
fact, at the time of his death, he supported the local church to the
extent of about 70 percent.
Mr. Speaker, let me recap where we are.
Joe goes to the small community in Colorado. He does not have any
money. He did not inherit. He is not wealthy, he and his wife both. At
that point in time, the role was she was to assume the role of being a
homemaker. She worked as hard as he did. She took care of the kids, who
are two young boys. He worked 10 to 14 hours every day of the week,
started in a ditch with a shovel, to try and make good to try and
accomplish the American dream.
And as often happens in America, if you work hard, you are rewarded.
That is what happened to this gentleman. Joe began to become rewarded.
The first person that got their hands on the money that he made was the
Government. And it was fair. Joe, as long as I knew him, never
complained about the taxes. He felt that he needed to give a fair share
to the Government for the roads and for the military and for our
national issues. So he paid his taxes.
As I mentioned before, he was never late on taxes. He never avoided
taxes. He was never cited by the Government for cheating on the taxes.
He paid his taxes. And then he took the other money that he made and he
put it back in the small company. This was the construction company
which employed a few people.
Pretty soon it employed a few more people, and pretty soon those
people were able to take money home to their family. And pretty soon
those people were able to save for their dream and their life because
Joe was able to employ them. It created jobs in our community.
The gentleman from California that spoke here earlier, the Democrat,
believes that the way to create jobs is to create them in Washington,
DC.
I am telling you, this death tax, that is exactly what it does. It
transfers wealth from a small community like ours or from any
community. And where does that money go? When the Government charges a
death tax, do you think that money stays in the community? Of course it
does not.
That money is immediately, within 9 months, has to be transferred to
your State for their estate death tax or, more importantly, to
Washington, DC; and then Washington, DC, redistributes it in this
community for jobs in Washington, DC. It does not help our little
communities out there in Colorado. And it did not help Joe.
But Joe kept working, and he accumulated more and more ownership of
the construction company until one day he was able to buy his own
construction company after years and years of making payments. And so
Joe ran that construction company, and he provided the majority of
support for the local church of which he was a member. He supported the
majority from a contribution point of view. He gave the largest
contributions to almost every charity drive in that community. When
somebody in that community got sick, when somebody in that community
had a hardship, they went to Joe for help and Joe helped them.
Now, I say Joe. I should also add, in fairness, Joe and his wife.
Because, with all due credit, his wife worked just as hard as Joe did.
So I should include both of those parties. So Joe and his wife, you
could always go to them and they would always help out in their local
community.
So what happens? Joe and his wife were able to educate their
children. Then Joe's wife takes ill. She does not come to a hospital in
Washington, DC. By the way, his kids were not educated in Washington,
DC. They were able to be sent to a State school. But Joe's wife becomes
sick. She becomes ill. She dies of cancer.
So Joe decides that he is going to sell the company. So Joe sells the
company. And he immediately pays a capital gains tax, pays a capital
gains tax on the sale of the company. Joe never complained about that.
He made capital gains on that company.
In other words, capital gains is you buy the company at this price,
and you sell it at that price. That profit is called a capital gain.
That is a legitimate gain upon which to charge tax. And that is exactly
what they did. He did not complain about it. He paid a tax in excess of
28 percent on the profit he made from the construction company he was
able to own after starting in the ditch with a shovel.
But then let me tell you what happened. Within 3 months Joe got
cancer and he died. Do you know what the Federal Government did to that
family estate? They went into that family estate, and they assessed it
with a tax of 55 percent. Now, you add the 55 percent; and you add 24
percent on capital gains because the construction company was the
primary asset in the family estate, and you come up with a tax of 79
percent.
What this man and his wife spent their entire life working for, 79
percent of it was taxed by the Government upon his death. That is
within that period of time, 4 months preceding his death and upon his
death.
Now, I know the son very well, both the sons. I asked the one son, I
said, now, tell me, 79 percent, that means your family got 21 cents on
the dollar? In other words, 21 percent of what your father and mother
spent their entire life working for, you got 21 cents on the dollar.
No, no, no, he says. We did not get 21 cents on the dollar. Because

[[Page H4112]]

we were forced to sell. We had to sell it within a very short period of
time. We could not get the best price. We had to get whatever somebody
would pay us so that we could pay the Government before the Government
then assessed penalties upon us because we did not pay the death tax in
time. So we really did not realize 21 percent.
This family told me they thought they realized about 15 cents on the
dollar. So their father and their mother worked their entire lives to
accomplish an American dream. They paid taxes their entire lives. They
never cheated the Government on one penny of tax; and upon their death,
the Government came in and took over 79 percent of the value of that
estate.
And Mr. Hunt calls that, why do the Republicans complain about that?
My colleague from California stands up and says, my gosh, it is going
to cost us $50 billion; who cares about the fairness. It is going to
cost the Government $50 billion to be fair to these people.
Well, now what happens? The next thing that happens is that the local
church comes to my friend, the son, the son of the father and mother I
just talked about that died, and they said, you know, we are sorry
about your father and your mother's passing. But did you know that your
father provided the majority of support for our local church? The son
says, no, I did not. And did you know that our drive for a new building
and these other charities, your father and mother were the primary
people who donated in our small town; they are the ones that made it
happen? The son says, no, I did not.
Well, they said, the church, we hope that you are going to be able to
continue on the commitment that your father and mother made, that you
are going to be able to carry on like they did and make these major
contributions, major in a small community. We are not talking about a
$10 million grant to the Kennedy Center. We are talking about a small
church in small town America. And we hope you are going to be able to
continue this.
Do you know what the son said? I cannot. I do not have the money. We
had to send that money to the Federal Government in Washington, D.C.
Now, this gentleman from California, my colleague, stands here and
talks about fairness, talks about the fact that if we eliminate the
estate tax that we are going to hurt churches. Wake up, my colleague.
You want to see what hurts churches and what hurts charitable causes?
Go out and see what you are doing with this punitive tax. And quit
bringing up the name Bill Gates and the name Forbes and all of these
wealthy families. Start talking about some of the people that do not
have a lot of cash in their pocket, but instead their pockets are full
of the American dream and they have had a little success so you
penalize them.
I see my colleague, the gentleman from Missouri (Mr. Hulshof), is
here; and I am happy to yield to the gentleman if he would like to join
in the discussion.
Mr. HULSHOF. Mr. Speaker, I appreciate the gentleman yielding very
much and especially on this very timely topic, as we have this
discussion tomorrow on get getting rid of the Federal death tax, this
very punitive tax.
I know the gentleman has been talking about a recent editorial, in
fact I think in today's Wall Street Journal. I am mindful of an
editorial that was written in yesterday's Washington Post in a similar
vein that indicates that what we are about to do tomorrow is
``Government by Bumper Sticker,'' as the editorial says.
I suspect that we are going to have during the course of this debate
that mantra from those who oppose this idea that this is tax breaks for
the wealthy.
And yet, speaking of bumper stickers, the gentleman has been talking
about friends near and dear to him back home in Colorado, but over the
Memorial Day recess I had the opportunity to travel the highways of
Missouri's 9th Congressional District, and I got behind this minivan
vehicle that was pulling a camper trailer behind it; and the bumper
sticker on the camper trailer said ``I'm spending my kids'
inheritance.''
And, of course, this is kind of a whimsical thought. And first I had
to make sure that was not my family that was traveling down the highway
spending their kids' inheritance. I think it points up really a more
serious issue; and that is, it really in some cases, and my colleague
pointed out some very real-life examples, in some cases it is cheaper
to sell off the family business pre-death rather than to experience
first of all the personal tragedy of the loss of a loved one but then
having to deal with the Internal Revenue Service at the moment of
death.
The best bumper sticker slogan that I can think of regarding this
issue is as follows: ``The death of a family member should not be a
taxable event.''
The point is, and I know that the editorials talk about and my
colleague has spoken very eloquently and very passionately about the
opponents of this repeal say, well, this is only going to help, as you
my colleague mentioned, the Bill Gateses or the wealthy class but the
wealthiest Americans.
I think what gets lost in all of the debate is how many resources,
how much money is spent, how much time and effort is spent in a way to
avoid the death tax. There is not a lot of discussion about the amount
of, again, resources committed to estate plans.
Now, I have got many friends that are tax lawyers or accountants. But
speaking of a real-life example, back home in Columbia, Missouri, which
is my home, a family, the Eiffert family, Howard Eiffert started a
lumber business, along with his wife Lucy; and they worked very hard
during the course of their lifetimes; and their two sons, Brad and
Greg, who now are the principals in that lumber business. And it has
been successful.
People around the mid-Missouri area recognize this lumber company.
Howard is now enjoying retirement, and he is becoming more seasoned as
a mature American. And yet the amount of money that the Eiffert family,
particularly the two principals are spending, $35,000 a year on
insurance premiums. And the sole purpose of purchasing that insurance
policy is to have something in place so that when the inevitable
mortality occurs that they will have proceeds from which they can then
pay the Federal death tax.

{time} 2145

That is $35,000 a year of capital that they could be investing in
their business, investing in their families, putting aside money for a
college education, whatever, letting them have that decision. But
instead they are making the choice to put 35 grand a year in an
insurance policy because they know that, as they have done their estate
planning, that they are going to be socked with the Federal death tax.
Mr. McINNIS. The gentleman's point is so well taken. In Colorado one
of the families I am very familiar with, it is a ranching family, they
barely get by from year to year but they have the land they have
accumulated. In fact I will give an example of my in-laws. The family
has been on there since the late 1860s. Somebody like our colleague
from California, the Democrat who supports this or the administration
that has actually asked for an increase, their response to my in-laws
and to other family farmers and ranchers is, go out and buy life
insurance. The example you just gave is that family puts out $35,000
per year. My in-laws do not have $35,000 a year to pay for life
insurance. They are lucky enough to get a new pickup every 5 or 6
years.
I wish some of these people who think this only applies to the Gates
family or some of the other wealthy, and mind you, I do not take a
thing away from the American dream, these people who have met with
success. I wish they could come out and see the kind of expenditures
that people like my in-laws have. They are very happy, they have lots
of love, they love the land they are on, but they are not driving new
pickups, flying in Gulfstreams, taking vacations in the Bahamas or
anywhere else. Every penny they have got has to go back into the cattle
operation. They do not have extra change for life insurance. I think
the point the gentleman brings up is very valid.
Mr. HULSHOF. I think what needs to be mentioned, Mr. Speaker, is that
under present law, certain estates are shielded from the Federal death
tax and that exemption or that unified credit, to talk the terminology,
presently is under $700,000. If you consider a family farm anywhere
across the country but certainly in Missouri, let

[[Page H4113]]

us say if you have a 400-acre farm and let us say for the purposes of
this hypothetical, $1500 per acre, some places in Missouri that would
be low, some places in Missouri perhaps high but I think on average if
you say $1500 per acre average, for a 400-acre farm, right there you
are talking about a $600,000 value just on land, not mentioning
equipment that is needed to produce, not talking about the residence or
the home.
My friend from Colorado mentioned his constituent, having grown up
and being born and grown up in the residence and worrying about being
able to hang on to that asset. Life insurance proceeds, all of this
becoming part of the estate that now is subject to the tax. Once that
estate value is $1 more than the exemption, you are looking at about a
37 percent tax rate up to, as the gentleman says, over half, 55 percent
and in some instances as high as 60 percent.
The point I would like to make is this, and I hope tomorrow as we
have this debate, I really would encourage or challenge anybody who
opposes this to give me a good policy reason why we have an inheritance
tax. Really what is the reason? Two weeks ago in this House we repealed
the Spanish American War tax that was imposed 102 years ago in 1898,
that, quote, temporary tax to fund the Spanish American War which now
we finally repealed, the inheritance tax as we know it today, 1916 and
really what is the policy reason? What is the justification? I can
really only think of two. One is to punish the successful, which I do
not think even our liberal friends would necessarily agree with that.
The only other instance I can think of as far as justification for
keeping the inheritance tax is redistribution of wealth. I think
certainly under our present tax code and the progressive nature, there
are many far better ways and certainly when we are talking about to,
quote, raise revenue for the government, rather than this very unfair
tax which I think punishes family farms, family businesses of whatever
size, whether they are facing the tax or whether they are expending
resources to avoid the tax along the course of one's lifetime, I think
that tomorrow afternoon we will be gratified with a vote. I would hope
and I know our friends down on the other end of Pennsylvania Avenue
have issued some sort of a veto threat under the present bill, I would
like to see as we get that vote tallied tomorrow, a two-thirds vote in
this House. It is a bipartisan bill with 45 Democratic cosponsors, many
Republicans, and so I urge my colleagues, Mr. Speaker, to vote in favor
of this repeal, to do what is right, because again the death of a
family member should not be a taxable event.
Mr. McINNIS. I would acknowledge to my friend the 45 Democrats that
have signed onto this, they have enough guts to stand up to the
administration and stand up and say wait a minute to their colleagues
on the Democratic side, let us talk about, is this tax justified. Sure
the revenue might be important but the primary focus of our question
here this evening and the primary focus of our debate tomorrow should
be, is this tax upon one's death a fair and justified tax? You can only
answer that honestly by saying no.
As the gentleman just very accurately pointed out, there are three
reasons that this tax came about. One was an animosity and a jealousy
towards the Rockefellers and the Carnegies and those kinds of families.
It was a transfer of wealth. Even Al Hunt in his article today in the
Wall Street Journal says the tax has always been aimed at the
accumulation of wealth by sons and daughters of the elite. So because
your parent as in my case in small town Colorado, because their parents
realized the American dream, because they had a company that employed
people in that community, they should be penalized.
The second reason that these aristocrats and I call these the
aristocrats, they may not have been aristocrats in wealth but they were
aristocrats in class warfare. That is the second reason. Hey, let's go
after the rich. The rich are always the wrong people. If you are rich
somehow in this country, they never figure out and the same with the
administration, they never figure out maybe you worked for it, maybe
the American dream allowed you to have it. And what does ``rich'' mean?
In a lot of our towns in Colorado, owning 50 acres is something. If I
had 50 acres, I would feel rich. The government looks at it as an
opportunity to tax you. I think it is very important that as we look
into tomorrow's debate that we look at real life examples that somehow
my colleagues on the Democratic side of the aisle who are opposing any
kind of reduction or oppose elimination of the death tax, that they
first go out into their community and do not go out to the Kennedys or
the Gates or the wealthy people, go out to the average person in your
community who has had some success, who has a home or some property
valued over that $675,000 and ask them what happens to their money upon
their death. What I urge my Democrat colleagues and what I ask the
administration to take a look at on their policy is remember that what
you are doing, you are removing money from a community and you are
transferring it to Washington, D.C.

Let me tell you what we have experienced in the State of Colorado.
Fortunately a lot of you visit Colorado, and I am happy you do.
Unfortunately a lot of people decided to stay there, it is so
beautiful. And so our land values have gone up in Colorado. What we are
seeing in Colorado is a lot of our beautiful open space, our mountains
are being converted to subdivisions. Those mountains and those fields
and those farms, they are farms and ranches. The reason that that land
is available is not because these families want to give up farming, not
because these families want to give up ranching, not because they want
to give up the rural way of life but because in many cases the Federal
Government through its death tax forces the family to sell that land.
If you want to help protect open space, let these farms and ranches
continue in existence and do not let the Al Hunts of this world tell
you, well, they ought to just go out and plan for it, or the Gates
family we are talking about or the Forbes family we are talking about,
or the Carnegies or the Rockefellers. Do not let them sell you on that.
They are sugar-coating it. Do not let them sugar-coat what you are
doing by this death tax. It is not right, it is not fair, and you ought
to admit it is not right and it is not fair. And you ought to get a
firsthand experience from your own constituents as to what it does to
your community. And the example I gave you this evening, what it did to
the local church. The ranch example, what I gave you this evening and
what it does to open space in States like Colorado, what it does to
little businesses like Brookhart Lumber Company in Delta, Colorado.
Headline in our local newspaper about 4 months ago, Brookhart must sell
because of estate taxes. Brookhart, by the way, is not Home Depot.
Brookhart maybe had 20 or 30 employees. Those people's jobs were at
risk. I do not know whether they had to sell it or liquidate it. In a
lot of cases they have to liquidate it. Remember that the only time
that money does not work in a community, the only time you do not see
the wealth, somebody's wealth circulate in a community is if a wealthy
person goes out and digs a hole and buries their money in the ground.
That does not happen very often. People who accumulate through success
money in a community put it in the bank, they hire more people, they
make investments, they buy land, that money circulates and circulates
and circulates. And all the death tax does is it goes in and forces
that money, one, to be converted to a cash form which requires in a lot
of cases forced sales; two, it requires double or triple taxation; and,
three, and probably as critical as anything else, it sucks that money
out of the small community or out of any community and transfers the
money to the Federal Government in Washington, D.C. for redistribution.
By the way, a lot of that money is redistributed in the confines of
Washington, D.C. So this community benefited upon the death of my
constituents out in rural Colorado. Where is the fairness of that?
Where is the fairness of a family in rural Missouri having their family
accumulation under the American dream sucked to Washington, D.C.? That
saying, the giant sucking sound of NAFTA many years ago, that is
exactly what the estate tax does.

I am asking all of my colleagues tomorrow when we do this debate, do
not

[[Page H4114]]

let them divert you into the vast wealth of a few rich American
families. Again, I do not take it away from those families. Those
people realized the American dream. Who cares how rich the person is
that invented the seat belt? Who cares how rich the person is going to
be that invents the cure to cancer or the cure to AIDS? Who cares? I do
not. That is the incentive that drives it. But do not be diverted by a
few select names they use tomorrow, of the status of like a Rockefeller
or a Carnegie. Instead, bring those people that are using that in the
debate, my colleagues and your colleagues, bring them back to the
American farm family, bring them back to the Colorado rancher, bring
them back to the small lumber company in Missouri, bring them back to
the small businesses in your communities. And then also ask them the
fundamental question of the death tax and every American ought to be
asked this question. Is it fair? Is it justified? How, Government, can
you say you should go upon the tragedy, upon the death of a person and
tax property upon which they have already taxed? I have no objection if
somebody has some property that has not been taxed. Everybody agrees
they should pay their fair share. But do not let them draw you off
course with that, either. Talk about the property they have already
paid the taxes on, and ask them, what does the American dream really
mean? Does the American dream mean that you are not entitled to pass
something on to your children? I can tell you in my own personal
example, my wife and I are not wealthy but I can tell you one of our
dreams in being in America is to save enough of our pennies so that
maybe our kids when they grow up can have their own house, maybe our
kids if they get in a hard spot and they need a new car, they can buy a
new car. I am not talking about buying them a jet, I am not talking
about buying them a palace in Aspen, Colorado. I am talking about
buying them a basic house. That would give my wife and I a great deal
of happiness if we could do something for our kids, but the government
is doing everything they can through this death tax to take that
American dream away from a lot of people. For a lot of our young
constituents out there, our young men and women in their early 20's who
are just starting on their career paths, who have in their mind a dream
to do what my wife and I dream of doing, and that is provide something
for the next generation, keep in mind that the group or society out
there that will do everything they can within their powers to prevent
you from going onto that next generation is your own government through
this unfair and unjust tax called the death tax.
Mr. Speaker, in the final minutes that I have, I would like to move
to another subject. Today I had an opportunity this morning to visit
with a famous singer, a gentlewoman named Carole King, very talented,
very capable, and frankly a very impressive person. It was interesting
to be a part of that discussion. The discussion was on wilderness areas
and preservation of the wilds in the United States. Fundamentally we
did not disagree on that issue. In fact, I am not sure anybody in this
country disagrees on the fundamental issues of trying to preserve and
utilize, kind of like Teddy Roosevelt. We have a right to use the land
but we have no right to abuse the land. I have never met people that
really consciously want to abuse the land and if we have those kinds of
people, we ought to do something to eliminate their opportunities to
abuse our land. But one of the things that I learned from our
conversation this morning is that even people of note sometimes have
not had the opportunity to understand the differences between the
western United States and the eastern United States.

{time} 2200

So in these next 9 minutes or so, I would like to show my colleagues
a fundamental difference in the eastern United States compared to the
western United States. Let us start with the first fundamental
difference.
Remember that in the west it does not rain like it does in the east.
In the east, in a lot of cases, their problem is getting rid of the
water. In the west, our problem is being able to save the water, to
store the water, to obtain the water. For example, my State, the State
of Colorado, is the only State in the union where all of our water runs
out of the State. We have no water, free-flowing water for our use that
comes into Colorado. So our water issues out here in the State of
Colorado are different than water issues here in the State of New York
or in the State of Maine or other places. Keep that in mind. If one
lives in the east there is a fundamental difference on water alone as
compared to the west. So it is very easy for people in the east, it is
a free vote for them, to oppose us in the west where we have to store
water.
The second point is demonstrated by this map that I have brought here
tonight. This map is titled, Government Lands. Take a look at the
government landownership in the east. It is very sparse. In fact, one
could take this pen and one could identify on this map with pencil
points the government landownership in the east, with a couple of
exceptions. We have a blotch in the Appalachias, we have the
Everglades, we have some up in the northeast.
But then take a look at the government ownership in the west. This is
the western United States. It is almost entirely owned by the
government. So people in the east have no idea, for the most part, what
kind of impact we have when we are surrounded by government lands, when
we live on government lands. So it is very easy for people in the east
to talk about life in the west, but it is very hard for them to
understand, and I say this with due respect to my colleagues from the
east. They have never had to live under those conditions.
Now, the history to that is really pretty simple. What happened in
the early days when this young, growing country wanted to increase in
size, we had to figure out a way to encourage people to leave the
comforts of the East Coast and to go west to settle this country,
because then, our purchases like the Louisiana Purchase, we needed to
possess the land. A deed did not mean much. One actually needed to be
in possession of the land. We know the old saying, possession is nine-
tenths of the law, that is where it came from. So to get people to
settle out here, they said, look, we will give you free land, it is
called the Homestead Act or the Home Stake Act, and it worked good.
Here is 160 acres, 320 acres. Well, it worked good until it got to the
Colorado Rockies or the Wyoming mountains or Montana or Idaho and they
found out that while in Kansas or Pennsylvania or eastern Colorado, or
Ohio, 160 acres could support one's family, here in these mountains,
160 acres would not even feed a cow.
So the government consciously decided, they said, well, we cannot
give them an equivalent amount of acres; for example, 3,000 acres would
be the equivalent of 160 acres. Let us go ahead and let the government
keep the title for this. Politically, that is the wise thing to do
because we cannot give that much land away to one person, so let us for
formality just keep the title, but we will let the people use it. It is
the government who put the people out there. It is the government who,
for generation after generation has asked these people to occupy and
make their living on this land. So understand that.
This morning, in my conversation with Carol King, I thought it was
very beneficial, and I look forward to future discussions, and I hope
my colleagues do too, with individuals of this type of capability to
explain the fundamental differences that exist. Because before we can
come to some kind of understanding between the east and the west,
before we can come to that understanding, we need to have an idea of
each other's lifestyle. The people in the east need to understand our
water problems in the west. The people in the east need to understand.
For example, when they want to build something, they go to their city
council or their county commissioner or their province. In the west, we
have to do all that, plus in many, many cases we have to go all the way
to the Federal Government clear in Washington to get permission to do
something out here.
So I am urging my colleagues from the east, do not just walk away
with a free vote on people in the west. Sit down with us. Talk to us
about what is different in the west than in the east. We all are
Americans. This is the United States of America. We are a team. But we
cannot be a team unless

[[Page H4115]]

every team member understands what the other team member faces,
understands the burdens that the other team members have. That is what
makes the strongest team.
This morning, in my conversation with Carol King, she indicated to me
that she was willing to sit down and try and listen to us and try and
understand what we face there. Although she is from Idaho, I am not
sure she was aware of this map. My guess is she had never seen this,
but I saw willingness there. I would express to my colleagues from the
east, take time to understand our water problems in the west. Take time
to understand why we need water storage in the west. Take time to
understand that most of the government ownership in this country is in
the west. Take time to include us on the team.
Yes, sure, in the east, you have the population, but understand, we
are Americans too, and we have a part to play, and let us play it.
Mr. Speaker, in conclusion, number one, I ask that we have more of a
team effort from our colleagues in the east. Help us out. We are a good
team, we make a great team.
Second of all, in the debate tomorrow on this death tax, do not let
them mislead us. This is not about the wealthiest families in America,
this is about a lot of average, middle-income families in America. This
is about a lot of family farms and a lot of family ranches and a lot of
family businesses. This is about local churches and local charitable
causes. This is about keeping money that was made under the American
dream in the local community. This is about not allowing that money to
be transferred from the local community to Washington, D.C. for
redistribution.
Mr. Chairman, I hope all of my colleagues pay attention in that
debate tomorrow. It is important, and fundamentally it is the question
we must ask, and my final comment of the evening is, is the death tax
fair? Is it justified to go to a family that has realized the American
dream and say to them, we do not want you to be able to transfer that
wealth to your next generation, we want to transfer that money to the
bureaucracy in Washington, D.C., so we are going to tax you on your
death. If you think it is fair, vote with the administration to
increase the estate tax $9.5 billion, which they are doing. But if you
do not think it is fair, do not play party line, Democrats. Forty-five
of you had enough guts to join us. Join us and let us get two-thirds up
on that voting panel tomorrow, so we can override the administration's
intent to raise the death tax, so that we can be fair to the many
people in America who have gone after, sought, and succeeded in the
American dream.

____________________