[Congressional Record Volume 146, Number 71 (Friday, June 9, 2000)]
[House]
[Pages H4128-H4164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page H4128]]
DEATH TAX ELIMINATION ACT OF 2000
Mr. ARCHER. Mr. Speaker, pursuant to House Resolution 519, I call up
the bill (H.R. 8) to amend the Internal Revenue Code of 1986, to phase
out the estate and gift taxes over a 10-year period, and ask for its
immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Kolbe). Pursuant to House Resolution
519, the bill is considered read for amendment.
The text of H.R. 8 is as follows:
H.R. 8
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Death Tax Elimination Act''.
SEC. 2. PHASEOUT OF ESTATE AND GIFT TAXES.
(a) Repeal of Estate and Gift Taxes.--Subtitle B of the
Internal Revenue Code of 1986 (relating to estate and gift
taxes) is repealed effective with respect to estates of
decedents dying, and gifts made, after December 31, 2009.
(b) Phaseout of Tax.--Subsection (c) of section 2001 of
such Code (relating to imposition and rate of tax) is amended
by adding at the end the following new paragraph:
``(3) Phaseout of tax.--In the case of estates of decedents
dying, and gifts made, during any calendar year after 1999
and before 2010--
``(A) In general.--The tentative tax under this subsection
shall be determined by using a table prescribed by the
Secretary (in lieu of using the table contained in paragraph
(1)) which is the same as such table; except that--
``(i) each of the rates of tax shall be reduced (but not
below zero) by the number of percentage points determined
under subparagraph (B), and
``(ii) the amounts setting forth the tax shall be adjusted
to the extent necessary to reflect the adjustments under
clause (i).
``(B) Percentage points of reduction.--
The number of
``For calendar year: percentage points is:
2000...........................................................5 ....
2001..........................................................10 ....
2002..........................................................15 ....
2003..........................................................20 ....
2004..........................................................25 ....
2005..........................................................30 ....
2006..........................................................35 ....
2007..........................................................40 ....
2008..........................................................45 ....
2009..........................................................50.....
``(C) Coordination with paragraph (2).--Paragraph (2) shall
be applied by reducing the 55 percent percentage contained
therein by the number of percentage points determined for
such calendar year under subparagraph (B).
``(D) Coordination with credit for state death taxes.--
Rules similar to the rules of subparagraph (A) shall apply to
the table contained in section 2011(b) except that the number
of percentage points referred to in subparagraph (A)(i) shall
be determined under the following table:
The number of
``For calendar year: percentage points is:
2000......................................................1\1/2\ ....
2001...........................................................3 ....
2002......................................................4\1/2\ ....
2003...........................................................6 ....
2004......................................................7\1/2\ ....
2005...........................................................9 ....
2006.....................................................10\1/2\ ....
2007..........................................................12 ....
2008.....................................................13\1/2\ ....
2009........................................................15.''....
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying, and gifts made,
after December 31, 1999.
The SPEAKER pro tempore. The amendment printed in the bill is
adopted.
The text of H.R. 8, as amended, is as follows:
H.R. 8
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Death Tax
Elimination Act of 2000''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
TITLE I--REPEAL OF ESTATE, GIFT, AND GENERATION-SKIPPING TAXES; REPEAL
OF STEP UP IN BASIS AT DEATH
SEC. 101. REPEAL OF ESTATE, GIFT, AND GENERATION-SKIPPING
TAXES.
(a) In General.--Subtitle B is hereby repealed.
(b) Effective Date.--The repeal made by subsection (a)
shall apply to the estates of decedents dying, and gifts and
generation-skipping transfers made, after December 31, 2009.
SEC. 102. TERMINATION OF STEP UP IN BASIS AT DEATH.
(a) Termination of Application of Section 1014.--Section
1014 (relating to basis of property acquired from a decedent)
is amended by adding at the end the following:
``(f ) Termination.--In the case of a decedent dying after
December 31, 2009, this section shall not apply to property
for which basis is provided by section 1022.''.
(b) Conforming Amendment.--Subsection (a) of section 1016
(relating to adjustments to basis) is amended by striking
``and'' at the end of paragraph (26), by striking the period
at the end of paragraph (27) and inserting ``, and'', and by
adding at the end the following:
``(28) to the extent provided in section 1022 (relating to
basis for certain property acquired from a decedent dying
after December 31, 2009).''.
SEC. 103. CARRYOVER BASIS AT DEATH.
(a) General Rule.--Part II of subchapter O of chapter 1
(relating to basis rules of general application) is amended
by inserting after section 1021 the following new section:
``SEC. 1022. CARRYOVER BASIS FOR CERTAIN PROPERTY ACQUIRED
FROM A DECEDENT DYING AFTER DECEMBER 31, 2009.
``(a) Carryover Basis.--Except as otherwise provided in
this section, the basis of carryover basis property in the
hands of a person acquiring such property from a decedent
shall be determined under section 1015.
``(b) Carryover Basis Property Defined.--
``(1) In general.--For purposes of this section, the term
`carryover basis property' means any property--
``(A) which is acquired from or passed from a decedent who
died after December 31, 2009, and
``(B) which is not excluded pursuant to paragraph (2).
The property taken into account under subparagraph (A) shall
be determined under section 1014(b) without regard to
subparagraph (A) of the last sentence of paragraph (9)
thereof.
``(2) Certain property not carryover basis property.--The
term `carryover basis property' does not include--
``(A) any item of gross income in respect of a decedent
described in section 691,
``(B) property of the decedent to the extent that the
aggregate adjusted fair market value of such property does
not exceed $1,300,000, and
``(C) property which was acquired from the decedent by the
surviving spouse of the decedent (and which would be
carryover basis property without regard to this subparagraph)
but only if the value of such property would have been
deductible from the value of the taxable estate of the
decedent under section 2056, as in effect on the day before
the date of the enactment of the Death Tax Elimination Act of
2000.
For purposes of this subsection, the term `adjusted fair
market value' means, with respect to any property, fair
market value reduced by any indebtedness secured by such
property.
``(3) Limitation on exception for property acquired by
surviving spouse.--The adjusted fair market value of property
which is not carryover basis property by reason of paragraph
(2)(C) shall not exceed $3,000,000.
``(4) Allocation of excepted amounts.--The executor shall
allocate the limitations under paragraphs (2)(B) and (3).
``(5) Inflation adjustment of excepted amounts.--In the
case of decedents dying in a calendar year after 2010, the
dollar amounts in paragraphs (2)(B) and (3) shall each be
increased by an amount equal to the product of--
``(A) such dollar amount, and
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year, determined by
substituting `2009' for `1992' in subparagraph (B) thereof.
If any increase determined under the preceding sentence is
not a multiple of $10,000, such increase shall be rounded to
the nearest multiple of $10,000.
``(c) Regulations.--The Secretary shall prescribe such
regulations as may be necessary to carry out the purposes of
this section.''.
(b) Miscellaneous Amendments Related To Carryover Basis.--
(1) Capital gain treatment for inherited art work or
similar property.--
(A) In general.--Subparagraph (C) of section 1221(a)(3)
(defining capital asset) is amended by inserting ``(other
than by reason of section 1022)'' after ``is determined''.
(B) Coordination with section 170.--Paragraph (1) of
section 170(e) (relating to certain contributions of ordinary
income and capital gain property) is amended by adding at the
end the following: ``For purposes of this paragraph, the
determination of whether property is a capital asset shall be
made without regard to the exception contained in section
1221(a)(3)(C) for basis determined under section 1022.''.
(2) Definition of executor.--Section 7701(a) (relating to
definitions) is amended by adding at the end the following:
``(47) Executor.--The term `executor' means the executor or
administrator of the decedent, or, if there is no executor or
administrator appointed, qualified, and acting within the
United States, then any person in actual or constructive
possession of any property of the decedent.''.
(3) Clerical amendment.--The table of sections for part II
of subchapter O of chapter 1 is amended by adding at the end
the following new item:
``Sec. 1022. Carryover basis for certain property acquired from a
decedent dying after December 31, 2009.''.
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying after December 31,
2009.
[[Page H4129]]
TITLE II--REDUCTIONS OF ESTATE AND GIFT TAX RATES PRIOR TO REPEAL
SEC. 201. ADDITIONAL REDUCTIONS OF ESTATE AND GIFT TAX RATES.
(a) Maximum Rate of Tax Reduced to 50 Percent.--
(1) In general.--The table contained in section 2001(c)(1)
is amended by striking the two highest brackets and inserting
the following:
$1,025,800, plus 50% of the excess over $2,500,000.''..................
(2) Phase-in of reduced rate.--Subsection (c) of section
2001 is amended by adding at the end the following new
paragraph:
``(3) Phase-in of reduced rate.--In the case of decedents
dying, and gifts made, during 2001, the last item in the
table contained in paragraph (1) shall be applied by
substituting `53%' for `50%'.''.
(b) Repeal of Phaseout of Graduated Rates.--Subsection (c)
of section 2001 is amended by striking paragraph (2) and
redesignating paragraph (3), as added by subsection (a), as
paragraph (2).
(c) Additional Reductions of Rates of Tax.--Subsection (c)
of section 2001, as so amended, is amended by adding at the
end the following new paragraph:
``(3) Phasedown of tax.--In the case of estates of
decedents dying, and gifts made, during any calendar year
after 2002 and before 2010--
``(A) In general.--Except as provided in subparagraph (C),
the tentative tax under this subsection shall be determined
by using a table prescribed by the Secretary (in lieu of
using the table contained in paragraph (1)) which is the same
as such table; except that--
``(i) each of the rates of tax shall be reduced by the
number of percentage points determined under subparagraph
(B), and
``(ii) the amounts setting forth the tax shall be adjusted
to the extent necessary to reflect the adjustments under
clause (i).
``(B) Percentage points of reduction.--
The number of
``For calendar year: percentage points is:
2003.........................................................1.0
2004.........................................................2.0
2005.........................................................3.0
2006.........................................................4.0
2007.........................................................5.5
2008.........................................................7.5
2009.........................................................9.5.
``(C) Coordination with income tax rates.--The reductions
under subparagraph (A)--
``(i) shall not reduce any rate under paragraph (1) below
the lowest rate in section 1(c), and
``(ii) shall not reduce the highest rate under paragraph
(1) below the highest rate in section 1(c).
``(D) Coordination with credit for state death taxes.--
Rules similar to the rules of subparagraph (A) shall apply to
the table contained in section 2011(b) except that the
Secretary shall prescribe percentage point reductions which
maintain the proportionate relationship (as in effect before
any reduction under this paragraph) between the credit under
section 2011 and the tax rates under subsection (c).''.
(d) Effective Dates.--
(1) Subsections (a) and (b).--The amendments made by
subsections (a) and (b) shall apply to estates of decedents
dying, and gifts made, after December 31, 2000.
(2) Subsection (c).--The amendment made by subsection (c)
shall apply to estates of decedents dying, and gifts made,
after December 31, 2002.
TITLE III--UNIFIED CREDIT REPLACED WITH UNIFIED EXEMPTION AMOUNT
SEC. 301. UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES
REPLACED WITH UNIFIED EXEMPTION AMOUNT.
(a) In General.--
(1) Estate tax.--Subsection (b) of section 2001 (relating
to computation of tax) is amended to read as follows:
``(b) Computation of Tax.--
``(1) In general.--The tax imposed by this section shall be
the amount equal to the excess (if any) of--
``(A) the tentative tax determined under paragraph (2),
over
``(B) the aggregate amount of tax which would have been
payable under chapter 12 with respect to gifts made by the
decedent after December 31, 1976, if the provisions of
subsection (c) (as in effect at the decedent's death) had
been applicable at the time of such gifts.
``(2) Tentative tax.--For purposes of paragraph (1), the
tentative tax determined under this paragraph is a tax
computed under subsection (c) on the excess of--
``(A) the sum of--
``(i) the amount of the taxable estate, and
``(ii) the amount of the adjusted taxable gifts, over
``(B) the exemption amount for the calendar year in which
the decedent died.
``(3) Exemption amount.--For purposes of paragraph (2), the
term `exemption amount' means the amount determined in
accordance with the following table:
``IThe exemption
caleamount is:
2001......................................................$675,000
2002 and 2003.............................................$700,000
2004......................................................$850,000
2005......................................................$950,000
2006 or thereafter......................................$1,000,000.
``(4) Adjusted taxable gifts.--For purposes of paragraph
(2), the term `adjusted taxable gifts' means the total amount
of the taxable gifts (within the meaning of section 2503)
made by the decedent after December 31, 1976, other than
gifts which are includible in the gross estate of the
decedent.''
(2) Gift tax.--Subsection (a) of section 2502 (relating to
computation of tax) is amended to read as follows:
``(a) Computation of Tax.--
``(1) In general.--The tax imposed by section 2501 for each
calendar year shall be the amount equal to the excess (if
any) of--
``(A) the tentative tax determined under paragraph (2),
over
``(B) the tax paid under this section for all prior
calendar periods.
``(2) Tentative tax.--For purposes of paragraph (1), the
tentative tax determined under this paragraph for a calendar
year is a tax computed under section 2001(c) on the excess
of--
``(A) the aggregate sum of the taxable gifts for such
calendar year and for each of the preceding calendar periods,
over
``(B) the exemption amount under section 2001(b)(3) for
such calendar year.''
(b) Repeal of Unified Credits.--
(1) Section 2010 (relating to unified credit against estate
tax) is hereby repealed.
(2) Section 2505 (relating to unified credit against gift
tax) is hereby repealed.
(c) Conforming Amendments.--
(1)(A) Subsection (b) of section 2011 is amended--
(i) by striking ``adjusted'' in the table, and
(ii) by striking the last sentence.
(B) Subsection (f ) of section 2011 is amended by striking
``, reduced by the amount of the unified credit provided by
section 2010''.
(2) Subsection (a) of section 2012 is amended by striking
``and the unified credit provided by section 2010''.
(3) Subparagraph (A) of section 2013(c)(1) is amended by
striking ``2010,''.
(4) Paragraph (2) of section 2014(b) is amended by striking
``2010, 2011,'' and inserting ``2011''.
(5) Clause (ii) of section 2056A(b)(12)(C) is amended to
read as follows:
``(ii) to treat any reduction in the tax imposed by
paragraph (1)(A) by reason of the credit allowable under
section 2010 (as in effect on the day before the date of the
enactment of the Death Tax Elimination Act of 2000) or the
exemption amount allowable under section 2001(b) with respect
to the decedent as a credit under section 2505 (as so in
effect) or exemption under section 2521 (as the case may be)
allowable to such surviving spouse for purposes of
determining the amount of the exemption allowable under
section 2521 with respect to taxable gifts made by the
surviving spouse during the year in which the spouse becomes
a citizen or any subsequent year,''.
(6) Subsection (a) of section 2057 is amended by striking
paragraphs (2) and (3) and inserting the following new
paragraph:
``(2) Maximum deduction.--The deduction allowed by this
section shall not exceed the excess of $1,300,000 over the
exemption amount (as defined in section 2001(b)(3)).''
(7)(A) Subsection (b) of section 2101 is amended to read as
follows:
``(b) Computation of Tax.--
``(1) In general.--The tax imposed by this section shall be
the amount equal to the excess (if any) of--
``(A) the tentative tax determined under paragraph (2),
over
``(B) a tentative tax computed under section 2001(c) on the
amount of the adjusted taxable gifts.
``(2) Tentative tax.--For purposes of paragraph (1), the
tentative tax determined under this paragraph is a tax
computed under section 2001(c) on the excess of--
``(A) the sum of--
``(i) the amount of the taxable estate, and
``(ii) the amount of the adjusted taxable gifts, over
``(B) the exemption amount for the calendar year in which
the decedent died.
``(3) Exemption amount.--
``(A) In general.--The term `exemption amount' means
$60,000.
``(B) Residents of possessions of the united states.--In
the case of a decedent who is considered to be a nonresident
not a citizen of the United States under section 2209, the
exemption amount under this paragraph shall be the greater
of--
``(i) $60,000, or
``(ii) that proportion of $175,000 which the value of that
part of the decedent's gross estate which at the time of his
death is situated in the United States bears to the value of
his entire gross estate wherever situated.
``(C) Special rules.--
``(i) Coordination with treaties.--To the extent required
under any treaty obligation of the United States, the
exemption amount allowed under this paragraph shall be equal
to the amount which bears the same ratio to the exemption
amount under section 2001(b)(3) (for the calendar year in
which the decedent died) as the value of the part of the
decedent's gross estate which at the time of his death is
situated in the United States bears to the value of his
entire gross estate wherever situated. For purposes of the
preceding sentence, property shall not be treated as situated
in the United States if such property is exempt from the tax
imposed by this subchapter under any treaty obligation of the
United States.
``(ii) Coordination with gift tax exemption and unified
credit.--If an exemption has been allowed under section 2521
(or a credit has been allowed under section 2505 as in effect
on the day before the date of the enactment of the Death Tax
Elimination Act of 2000) with respect to any gift made by the
decedent, each dollar amount contained in subparagraph (A) or
(B) or the exemption amount applicable under clause (i) of
this subparagraph (whichever applies) shall be reduced by the
exemption so allowed under section 2521 (or, in the case of
such a credit, by the amount of the gift for which the credit
was so allowed).''.
(8) Section 2102 is amended by striking subsection (c).
[[Page H4130]]
(9)(A) Subsection (a) of section 2107 is amended by adding
at the end the following new paragraph:
``(3) Limitation on exemption amount.--Subparagraphs (B)
and (C) of section 2101(b)(3) shall not apply in applying
section 2101 for purposes of this section.''.
(B) Subsection (c) of section 2107 is amended--
(i) by striking paragraph (1) and by redesignating
paragraphs (2) and (3) as paragraphs (1) and (2),
respectively, and
(ii) by striking the second sentence of paragraph (2) (as
so redesignated).
(10) Paragraph (1) of section 6018(a) is amended by
striking ``the applicable exclusion amount in effect under
section 2010(c)'' and inserting ``the exemption amount under
section 2001(b)(3)''.
(11) Subparagraph (A) of section 6601( j)(2) is amended to
read as follows:
``(A) the amount of the tentative tax which would be
determined under the rate schedule set forth in section
2001(c) if the amount with respect to which such tentative
tax is to be computed were $1,000,000, or''.
(12) The table of sections for part II of subchapter A of
chapter 11 is amended by striking the item relating to
section 2010.
(13) The table of sections for subchapter A of chapter 12
is amended by striking the item relating to section 2505.
(d) Effective Date.--The amendments made by this section--
(1) insofar as they relate to the tax imposed by chapter 11
of the Internal Revenue Code of 1986, shall apply to estates
of decedents dying after December 31, 2000, and
(2) insofar as they relate to the tax imposed by chapter 12
of such Code, shall apply to gifts made after December 31,
2000.
TITLE IV--MODIFICATIONS OF GENERATION-SKIPPING TRANSFER TAX
SEC. 401. DEEMED ALLOCATION OF GST EXEMPTION TO LIFETIME
TRANSFERS TO TRUSTS; RETROACTIVE ALLOCATIONS.
(a) In General.--Section 2632 (relating to special rules
for allocation of GST exemption) is amended by redesignating
subsection (c) as subsection (e) and by inserting after
subsection (b) the following new subsections:
``(c) Deemed Allocation to Certain Lifetime Transfers to
GST Trusts.--
``(1) In general.--If any individual makes an indirect skip
during such individual's lifetime, any unused portion of such
individual's GST exemption shall be allocated to the property
transferred to the extent necessary to make the inclusion
ratio for such property zero. If the amount of the indirect
skip exceeds such unused portion, the entire unused portion
shall be allocated to the property transferred.
``(2) Unused portion.--For purposes of paragraph (1), the
unused portion of an individual's GST exemption is that
portion of such exemption which has not previously been--
``(A) allocated by such individual,
``(B) treated as allocated under subsection (b) with
respect to a direct skip occurring during or before the
calendar year in which the indirect skip is made, or
``(C) treated as allocated under paragraph (1) with respect
to a prior indirect skip.
``(3) Definitions.--
``(A) Indirect skip.--For purposes of this subsection, the
term `indirect skip' means any transfer of property (other
than a direct skip) subject to the tax imposed by chapter 12
made to a GST trust.
``(B) GST trust.--The term `GST trust' means a trust that
could have a generation-skipping transfer with respect to the
transferor unless--
``(i) the trust instrument provides that more than 25
percent of the trust corpus must be distributed to or may be
withdrawn by 1 or more individuals who are non-skip persons--
``(I) before the date that the individual attains age 46,
``(II) on or before one or more dates specified in the
trust instrument that will occur before the date that such
individual attains age 46, or
``(III) upon the occurrence of an event that, in accordance
with regulations prescribed by the Secretary, may reasonably
be expected to occur before the date that such individual
attains age 46;
``(ii) the trust instrument provides that more than 25
percent of the trust corpus must be distributed to or may be
withdrawn by one or more individuals who are non-skip persons
and who are living on the date of death of another person
identified in the instrument (by name or by class) who is
more than 10 years older than such individuals;
``(iii) the trust instrument provides that, if one or more
individuals who are non-skip persons die on or before a date
or event described in clause (i) or (ii), more than 25
percent of the trust corpus either must be distributed to the
estate or estates of one or more of such individuals or is
subject to a general power of appointment exercisable by one
or more of such individuals;
``(iv) the trust is a trust any portion of which would be
included in the gross estate of a non-skip person (other than
the transferor) if such person died immediately after the
transfer;
``(v) the trust is a charitable lead annuity trust (within
the meaning of section 2642(e)(3)(A)) or a charitable
remainder annuity trust or a charitable remainder unitrust
(within the meaning of section 664(d)); or
``(vi) the trust is a trust with respect to which a
deduction was allowed under section 2522 for the amount of an
interest in the form of the right to receive annual payments
of a fixed percentage of the net fair market value of the
trust property (determined yearly) and which is required to
pay principal to a non-skip person if such person is alive
when the yearly payments for which the deduction was allowed
terminate.
For purposes of this subparagraph, the value of transferred
property shall not be considered to be includible in the
gross estate of a non-skip person or subject to a right of
withdrawal by reason of such person holding a right to
withdraw so much of such property as does not exceed the
amount referred to in section 2503(b) with respect to any
transferor, and it shall be assumed that powers of
appointment held by non-skip persons will not be exercised.
``(4) Automatic allocations to certain gst trusts.--For
purposes of this subsection, an indirect skip to which
section 2642(f ) applies shall be deemed to have been made
only at the close of the estate tax inclusion period. The
fair market value of such transfer shall be the fair
market value of the trust property at the close of the
estate tax inclusion period.
``(5) Applicability and effect.--
``(A) In general.--An individual--
``(i) may elect to have this subsection not apply to--
``(I) an indirect skip, or
``(II) any or all transfers made by such individual to a
particular trust, and
``(ii) may elect to treat any trust as a GST trust for
purposes of this subsection with respect to any or all
transfers made by such individual to such trust.
``(B) Elections.--
``(i) Elections with respect to indirect skips.--An
election under subparagraph (A)(i)(I) shall be deemed to be
timely if filed on a timely filed gift tax return for the
calendar year in which the transfer was made or deemed to
have been made pursuant to paragraph (4) or on such later
date or dates as may be prescribed by the Secretary.
``(ii) Other elections.--An election under clause (i)(II)
or (ii) of subparagraph (A) may be made on a timely filed
gift tax return for the calendar year for which the election
is to become effective.
``(d) Retroactive Allocations.--
``(1) In general.--If--
``(A) a non-skip person has an interest or a future
interest in a trust to which any transfer has been made,
``(B) such person--
``(i) is a lineal descendant of a grandparent of the
transferor or of a grandparent of the transferor's spouse or
former spouse, and
``(ii) is assigned to a generation below the generation
assignment of the transferor, and
``(C) such person predeceases the transferor,
then the transferor may make an allocation of any of such
transferor's unused GST exemption to any previous transfer or
transfers to the trust on a chronological basis.
``(2) Special rules.--If the allocation under paragraph (1)
by the transferor is made on a gift tax return filed on or
before the date prescribed by section 6075(b) for gifts made
within the calendar year within which the non-skip person's
death occurred--
``(A) the value of such transfer or transfers for purposes
of section 2642(a) shall be determined as if such allocation
had been made on a timely filed gift tax return for each
calendar year within which each transfer was made,
``(B) such allocation shall be effective immediately before
such death, and
``(C) the amount of the transferor's unused GST exemption
available to be allocated shall be determined immediately
before such death.
``(3) Future interest.--For purposes of this subsection, a
person has a future interest in a trust if the trust may
permit income or corpus to be paid to such person on a date
or dates in the future.''.
(b) Conforming Amendment.--Paragraph (2) of section 2632(b)
is amended by striking ``with respect to a direct skip'' and
inserting ``or subsection (c)(1)''.
(c) Effective Dates.--
(1) Deemed allocation.--Section 2632(c) of the Internal
Revenue Code of 1986 (as added by subsection (a)), and the
amendment made by subsection (b), shall apply to transfers
subject to chapter 11 or 12 made after December 31, 1999, and
to estate tax inclusion periods ending after December 31,
1999.
(2) Retroactive allocations.--Section 2632(d) of the
Internal Revenue Code of 1986 (as added by subsection (a))
shall apply to deaths of non-skip persons occurring after
December 31, 1999.
SEC. 402. SEVERING OF TRUSTS.
(a) In General.--Subsection (a) of section 2642 (relating
to inclusion ratio) is amended by adding at the end the
following new paragraph:
``(3) Severing of trusts.--
``(A) In general.--If a trust is severed in a qualified
severance, the trusts resulting from such severance shall be
treated as separate trusts thereafter for purposes of this
chapter.
``(B) Qualified severance.--For purposes of subparagraph
(A)--
``(i) In general.--The term `qualified severance' means the
division of a single trust and the creation (by any means
available under the governing instrument or under local law)
of two or more trusts if--
``(I) the single trust was divided on a fractional basis,
and
``(II) the terms of the new trusts, in the aggregate,
provide for the same succession of interests of beneficiaries
as are provided in the original trust.
``(ii) Trusts with inclusion ratio greater than zero.--If a
trust has an inclusion ratio of greater than zero and less
than 1, a severance is a qualified severance only if the
single trust is divided into two trusts, one of which
receives a fractional share of the total value of all trust
assets equal to the applicable fraction of the single trust
immediately before the severance. In such case, the trust
receiving such fractional share shall have an inclusion ratio
of zero and the other trust shall have an inclusion ratio of
1.
``(iii) Regulations.--The term `qualified severance'
includes any other severance permitted under regulations
prescribed by the Secretary.
``(C) Timing and manner of severances.--A severance
pursuant to this paragraph may be
[[Page H4131]]
made at any time. The Secretary shall prescribe by forms
or regulations the manner in which the qualified severance
shall be reported to the Secretary.''.
(b) Effective Date.--The amendment made by this section
shall apply to severances after December 31, 1999.
SEC. 403. MODIFICATION OF CERTAIN VALUATION RULES.
(a) Gifts for Which Gift Tax Return Filed or Deemed
Allocation Made.--Paragraph (1) of section 2642(b) (relating
to valuation rules, etc.) is amended to read as follows:
``(1) Gifts for which gift tax return filed or deemed
allocation made.--If the allocation of the GST exemption to
any transfers of property is made on a gift tax return filed
on or before the date prescribed by section 6075(b) for such
transfer or is deemed to be made under section 2632 (b)(1) or
(c)(1)--
``(A) the value of such property for purposes of subsection
(a) shall be its value as finally determined for purposes of
chapter 12 (within the meaning of section 2001(f )(2)), or,
in the case of an allocation deemed to have been made at the
close of an estate tax inclusion period, its value at the
time of the close of the estate tax inclusion period, and
``(B) such allocation shall be effective on and after the
date of such transfer, or, in the case of an allocation
deemed to have been made at the close of an estate tax
inclusion period, on and after the close of such estate tax
inclusion period.''.
(b) Transfers at Death.--Subparagraph (A) of section
2642(b)(2) is amended to read as follows:
``(A) Transfers at death.--If property is transferred as a
result of the death of the transferor, the value of such
property for purposes of subsection (a) shall be its value as
finally determined for purposes of chapter 11; except that,
if the requirements prescribed by the Secretary respecting
allocation of post-death changes in value are not met, the
value of such property shall be determined as of the time of
the distribution concerned.''.
(c) Effective Date.--The amendments made by this section
shall apply to transfers subject to chapter 11 or 12 of the
Internal Revenue Code of 1986 made after December 31, 1999.
SEC. 404. RELIEF PROVISIONS.
(a) In General.--Section 2642 is amended by adding at the
end the following new subsection:
``(g) Relief Provisions.--
``(1) Relief from late elections.--
``(A) In general.--The Secretary shall by regulation
prescribe such circumstances and procedures under which
extensions of time will be granted to make--
``(i) an allocation of GST exemption described in paragraph
(1) or (2) of subsection (b), and
``(ii) an election under subsection (b)(3) or (c)(5) of
section 2632.
Such regulations shall include procedures for requesting
comparable relief with respect to transfers made before the
date of the enactment of this paragraph.
``(B) Basis for determinations.--In determining whether to
grant relief under this paragraph, the Secretary shall take
into account all relevant circumstances, including evidence
of intent contained in the trust instrument or instrument of
transfer and such other factors as the Secretary deems
relevant. For purposes of determining whether to grant relief
under this paragraph, the time for making the allocation (or
election) shall be treated as if not expressly prescribed by
statute.
``(2) Substantial compliance.--An allocation of GST
exemption under section 2632 that demonstrates an intent to
have the lowest possible inclusion ratio with respect to a
transfer or a trust shall be deemed to be an allocation of so
much of the transferor's unused GST exemption as produces the
lowest possible inclusion ratio. In determining whether there
has been substantial compliance, all relevant circumstances
shall be taken into account, including evidence of intent
contained in the trust instrument or instrument of transfer
and such other factors as the Secretary deems relevant.''.
(b) Effective Dates.--
(1) Relief from late elections.--Section 2642(g)(1) of the
Internal Revenue Code of 1986 (as added by subsection (a))
shall apply to requests pending on, or filed after, December
31, 1999.
(2) Substantial compliance.--Section 2642(g)(2) of such
Code (as so added) shall apply to transfers subject to
chapter 11 or 12 of the Internal Revenue Code of 1986 made
after December 31, 1999. No implication is intended with
respect to the availability of relief from late elections or
the application of a rule of substantial compliance on or
before such date.
TITLE V--CONSERVATION EASEMENTS
SEC. 501. EXPANSION OF ESTATE TAX RULE FOR CONSERVATION
EASEMENTS.
(a) Where Land Is Located.--
(1) In general.--Clause (i) of section 2031(c)(8)(A)
(defining land subject to a conservation easement) is
amended--
(A) by striking ``25 miles'' both places it appears and
inserting ``50 miles'', and
(B) striking ``10 miles'' and inserting ``25 miles''.
(2) Effective date.--The amendments made by this subsection
shall apply to estates of decedents dying after December 31,
1999.
(b) Clarification of Date for Determining Value of Land and
Easement.--
(1) In general.--Section 2031(c)(2) (defining applicable
percentage) is amended by adding at the end the following new
sentence: ``The values taken into account under the preceding
sentence shall be such values as of the date of the
contribution referred to in paragraph (8)(B).''.
(2) Effective date.--The amendment made by this subsection
shall apply to estates of decedents dying after December 31,
1997.
The SPEAKER pro tempore. After one hour of debate on the bill, as
amended, it shall be in order to consider the further amendment printed
in House Report 106-658, which may be offered only by the Member
designated in the report, shall be considered read, and shall be
debatable for one hour, equally divided and controlled by the proponent
and an opponent.
The gentleman from Texas (Mr. Archer) and the gentleman from New York
(Mr. Rangel) each will control 30 minutes.
The Chair recognizes the gentleman from Texas (Mr. Archer).
General Leave
Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
and include extraneous material on the bill, H.R. 8.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today is another historic and proud moment for this
House, for our country, and for me personally. When I came to Congress
30 years ago, I had three major goals. One was to balance the budget so
that future generations would not have to pay the high debt service
charges. The second was to eliminate the earnings limit on Social
Security beneficiaries so that they continue to work without suffering
the loss of their Social Security benefits. Both of those two are now
the law of the land.
{time} 1000
My third goal was to abolish the death tax. And today we will do that
on a bipartisan basis. We will completely repeal it. We will erase it
from the Tax Code forever, in hopes that it will never return from the
dead to haunt American families, farms, businesses. This is truly an
historic day.
The death tax is wrong. Death as an event should not trigger a tax.
Some have even said that it is ghoulish to think that someone who works
an entire lifetime saving, preparing to leave something to their
children, starting a business, running a ranch or a farm, and all the
time paying taxes to find that what is left over gets hit again from
the grave.
The ancient Egyptians built elaborate fortresses and tunnels and even
posted guards at tombs to stop grave robbers. In today's America, we
call that estate planning.
Today, Americans are trying to avoid the death tax like never before.
In fact, they spend millions and millions of dollars every year paying
accountants, lawyers and financial planners to try to limit this tax in
any way that they can. And why should they not? The death tax is the
natural born killer of everything that they have worked for their
entire lives. It is the wrecking ball of a life's worth of achievement
and success.
Think about it. The top death tax rate today in the law is 60
percent. That means the IRS gets 122 percent to 150 percent of what the
children get. Is something not wrong when the government gets more than
the family? And that is just the first generation of children. If
someone wanted to help their grandchildren, and I know many of us in
this Chamber and those watching on C-SPAN have grandchildren, I have 14
myself, so just listen to this: Because of the death tax and what is
part of it, a part of the death tax, the so-called generation-skipping
penalty, the IRS gets 244 percent of what a grandchild does if a dying
person leaves their assets to their grandchildren. That is outlandish.
So today we are going to do what is right and we are going to fix it
once and for all.
The death tax is especially threatening to the backbone of America's
economy, the small business owner and the family farm. That is why
repealing the death tax is priority number one for the National
Federation of Independent Businesses and the American Farm Bureau.
Imagine a family owning and working on a family farm for 30 years.
They build and develop the land with the hope of passing it along to
their children so that they can have a better life. But after their
death, the children tragically find that the farm will not
[[Page H4132]]
be staying in the family but will instead be going on the auction block
to pay the IRS. Unfortunately, this is not a rare occurrence. Many
family farms must be sold to pay the Federal taxes due on the property
and many, many businesses, too.
One-third of small business owners today will have to sell outright
or liquidate a part of their company to pay death taxes. More than 70
percent of family businesses do not survive the second generation, and
87 percent do not make it to the third generation.
The impact of the death tax on small business means it is especially
threatening to women, women who are creating business at twice the rate
of men today. Since 1987, the number of female-owned ventures has
doubled from 4.5 million to 9.1 million. Last year women-owned
companies employed more than 27 million Americans, nearly 9 million
more than in 1996. These are the new CEOs. U.S. News and World Report,
on its cover, featured this exact item. That is why women business
owners are in strong support of complete repeal of the death tax.
But the death tax does not just hit the business owner. It is a job
killer, too. In fact, the tax hits hard-working Americans who lose
their jobs and their health care when a business or a farm for which
they work must be sold to pay the tax. Sixty percent of small business
owners report that they would create new jobs over the coming year if
estate taxes were eliminated. Half of those who must liquidate the
business to pay the IRS will each have to eliminate 30 or more jobs.
That is one of the reasons why liberals, moderates, and conservatives
alike support getting rid of the death tax entirely. They understand
this is not a rich against the poor issue, it is a jobs issue and a
fairness issue. We should reward hard work and success and not punish
it.
Finally, the death tax is the grim reaper of personal savings in this
country. The only cloud on our economic horizon is the death of
personal savings in the U.S. Today's personal savings rate is the
lowest it has ever been in the history of our nation, and the death tax
is a dollar-for-dollar tax on savings.
In summary, the death tax is simply unfair; and it is time to repeal
it once and for all. No American, no matter what their income, should
have to pay taxes when they die. They have worked all their life, they
have paid taxes on that income all of their life, and they should not
get socked one more time from the grave if they want to pass it on to
their children or their grandchildren. Our children should come first,
before the IRS, in the pecking order of family business, farm, or
savings account.
Benjamin Franklin, one of the wisest Founding Fathers, said there
were two certainties in life, death and taxes. But I doubt if Dr.
Franklin, even with his extraordinary foresight, could have told us
that today both would occur at the same time. It is time to bury the
death tax.
Mr. Speaker, I reserve the balance of my time.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
The Committee on Ways and Means, under the leadership of the
majority, has embarked on a political scheme before this election to
present to the American people every week some type of a tax problem
that they have not found a solution for. Unfortunately, before they
bring the solution to the floor, they make certain that the President
of the United States is going to veto it.
It is absolutely remarkable how if they find a mosquito, they have to
run for a sledgehammer to get rid of the problem. Take, for example,
our very complex tax system, which year after year that they have been
in the majority they have made even more complex. Just weigh the Tax
Code that we had before they had the majority and weigh it today and
see what they have done to it.
Do our colleagues come and say to the Democrats and to the President
that this system is overbearing, can we not work together to resolve it
by simplifying it? No. No. What is the Republican solution? Let us pull
the Tax Code up by the roots.
If we have a problem with people being married paying too much taxes,
do they just take care of it? No. They will have a tax cut so severe
that the President of the United States would say we should take care
of that problem, but we should not have to do it at the expense of not
reducing the Federal debt, placing into jeopardy the Social Security
System and our Medicare system.
The emotional thing to talk about is how families would lose their
businesses and their farms as a result of the hard work that their
parents and grandparents have done. It would be wrong for this to
happen. And even though we are only talking about 2 percent of the
American people that would be subjected to a review of their taxes,
they are still Americans, and they are still entitled to equity. But do
we really say that the answer to this problem, and it is a problem, is
to repeal the estate tax completely? Under the Democratic alternative
the Republicans would be hard put to see whether any rancher, any
farmer, any small business will be lost as a result of the $4 million
exemption. I say exemption, which means that they do not even have to
think about the reduced rate of taxes.
Every estate planner knows that we have a better alternative. They
know we take care of the problem. But we do not take care of the
multibillion-dollar estates. That is what we do not take care of. We do
not take care of those people who have had creative ideas, who have
built up equities and tax liabilities that go into many numbers in
terms of tax liabilities, that have never been taxed and would only be
exposed to taxation at death. We do not talk about those. Oh, we
probably have some in Texas and some in New York, but what we wanted to
do was take care of 99.9 percent of the businesses that would be
adversely affected, and this we have done.
My colleagues have an emotional argument talking about repeal. But
one day the American people will take a look at the cost of the
Republicans' bill, the cost of repeal, and wonder whether the
Republicans were thinking about them or whether they had a handful of
people that have been kind to them that they are trying to get relief
for. Because anybody can tell my colleagues that their bill in the year
2011 will start having a revenue hemorrhage of $50 billion a year.
Maybe my colleagues are prepared to say that they feel that we can
afford to do that and take care of Social Security, take care of
Medicare, take care of the Patients' Bill of Rights, take care of
affordable prescriptions; or, really, do they care at all?
This is a great shot in the arm for my colleagues because they know
the President is going to be responsible. None of them would be so
irresponsible to be proposing this if they thought it would become law.
They know it is going to be vetoed. They know that next week they will
be coming back with something else that will be vetoed.
I am just asking this. In the last weeks of this Congress, can we not
come together on something and agree on it? Must we try to seek a
Republican political statement instead of a bipartisan agreement? If
everyone would conclude that the Democrat alternative takes care of the
problem that we are talking about, why do we have to go beyond that and
hemorrhage the revenue for those people that will become eligible in
the next 10 years for Medicare and Social Security? My Republican
colleagues know it is going to be vetoed, but it is not the right thing
to do.
Mr. Speaker, I ask unanimous consent to yield the balance of my time
to the gentleman from Maryland (Mr. Cardin), and that he be allowed to
manage the time on our side.
The SPEAKER pro tempore (Mr. Kolbe). Without objection, the gentleman
from Maryland (Mr. Cardin) will control the rest of the gentleman's
time.
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Washington (Ms. Dunn), who has authored this bill in combination with
the gentleman from Tennessee (Mr. Tanner) on a bipartisan basis. She
has worked so hard over the years to get us to where we are today.
Ms. DUNN. Mr. Speaker, I want to thank the gentleman for yielding me
this time and for bringing this bipartisan bill to the floor of the
House today.
[[Page H4133]]
I want to thank my colleague, the gentleman from Tennessee (Mr.
Tanner), for the hard work he has done over the years as we move this
important endeavor to the floor of the House. H.R. 8 has the support of
246 Members of the House of Representatives, 46 Democrats, and one
Independent.
{time} 1015
There is one main reason, Mr. Speaker, why the majority of this
Congress and 85 percent of the American people support the repeal of
the death tax, that reason is fairness. It has been said that only with
our government are you given a certificate at birth, a license at
marriage, and a bill at death.
One of the most compelling aspects of the American dream is to make
life better for our children and our loved ones. Yet the current tax
treatment of a person's life savings is so onerous that when one dies,
the children are often forced to turn over sometimes more than half of
their savings of their parent's hard work during their lifetimes to the
Federal Government.
Even worse, not only does this take place at an agonizing time in the
life of a family, but often these people are forced to watch their
loved one's legacy be snatched up by an entity not known for its great
insight in spending taxpayer funds. This is not fair.
Death should not trigger a tax. We should not dishonor the hard work
of those who have passed on. This is especially true, Mr. Speaker, of
minority and women-owned businesses.
Minorities understand that sometimes it takes two to three
generations to build an economic foothold in a community through a
family-held business. That is why the Black Chamber of Commerce, the
Hispanic Chamber of Commerce, the National Indian Business Association,
and the Pan-American Chamber of Commerce support H.R. 8.
In addition, a recent study by the National Association of Women
Business Owners revealed that women-owned businesses on average spend
$1,000 a month complying for the death tax. These dollars should go to
benefits like health coverage for the 44 million who are uninsured. Mr.
Speaker, I urge my colleagues on the floor to vote for H.R. 8.
Mr. CARDIN. Mr. Speaker, I yield 2 minutes to a senior Member of the
Committee on Ways and Means, the gentleman from California (Mr. Stark).
(Mr. STARK asked and was given permission to revise and extend his
remarks.)
Mr. STARK. Mr. Speaker, I have a rather personal interest in this
legislation, and I have heard a lot from the chairman of the Committee
on Ways and Means about what we owe our children, so I have come to the
well this morning and apologize to my children, I have 5, and 10
grandchildren.
I am probably one of the few Members of the House who started out
poor. I used to say I was so poor as a kid I never slept alone until I
was married. But through good luck and the action of commerce, I was
able to amass what most of the people in my district would call a
fortune. And I have not paid much tax on that. I pay income tax each
year. I pay more income tax than you pay me salary, but most of what I
have was accumulated through capital gains, and I have not sold it. I
do not intend to.
My kids will get it pretty much free. So I apologize because I am
going to vote against this. Kids, to Jeff and Bea and Thekla and Sarah,
Fortney and the 10 grandkids, you are going to have to pay some tax.
This is a little family business, it might be 7 figures, but you are
going to get a down payment on that from your mother and me of
$1,350,000 free. You have not worked a day in your life for that.
You have a college education, down payment on your homes, cars, but
you have not worked worth squat. But you are going to get a million, a
million and a half bucks. And then you are going to get half that
business free and you may have to pay 50 percent, 55 percent on that
tax if they appraise the business at its full value. And you are going
to get 10 years to pay that off at a below prime rate interest rate.
And, kids, if you are so dumb that you cannot run that business with
over a 50 percent down payment given to you and 10 years to pay off the
balance at a low rate, you do not deserve it.
You ought to have been trained in this country to earn your own way
and pay your taxes every day so that Dad can have a prescription drug
benefit and I can have a decent nursing home so you do not have to
worry about taking care of me in my dotage.
There are not very many Members of Congress that are going to pay any
inheritance tax, and do not believe them. This is a gift to the rich
not for independent, smart kids like I have hoped I raised.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from South
Carolina (Mr. Graham).
Mr. GRAHAM. Mr. Speaker, the gentleman has quite a legacy. In
response to the gentleman that just spoke, the gentleman from
California (Mr. Stark), I am the first person in my family to ever
graduate college, I do not have a fortune. I admire the fact that he
wants to construct life for his children a certain way, but this
gentleman is making decisions for millions of Americans, let him make
his own decision.
What I would like to have is a decision made up here that empowers
people that if they want to give money to the church instead of the
government they can. We collect less than 2 percent from the death tax
in this country, and to get that 2 percent here is what you lose: You
lose family farms in my district in droves because people are land rich
on paper and cash poor. You lose the small business that cannot go to
the next generation to get less than 2 percent to monkey with the money
up here.
Philanthropy is lost. The human spirit is suppressed. Most people
want a legacy. They want to give something back, a library, a hospital
wing, a donation to their church. This is a form of socialism that must
go. Let us start a new century with a Tax Code that brings out the best
in the American people not the worst. To get 2 percent of the money, we
have to ruin a lot of families and that is unnecessary. I say
congratulations to the gentleman from Texas (Mr. Archer)
Mr. CARDIN. Mr. Speaker, I yield 2 minutes to a distinguished member
of the Committee on Ways and Means, the gentleman from Michigan (Mr.
Levin).
(Mr. LEVIN asked and was given permission to revise and extend his
remarks and include extraneous material.)
Mr. LEVIN. Mr. Speaker, socialism? Teddy Roosevelt's idea? Members
come here with all the talk about fairness and about women and
minorities, we are talking about 2 percent of the decendents in this
country, the very wealthy; that is what we are talking about.
What is the problem? The substitute addresses them, family farms?
Ninety-eight or 90 percent of the family farms will be taken out of an
estate tax by the substitute. Small businesses? Only 1/10 of 1 percent
are subject to the estate tax. Members come here raising the banner of
all of these small businesses. We are talking about a small portion of
them, and the vast majority of them will be taken care of by the
substitute. And all of the others who are subject to the estate tax,
the substitute addresses their needs faster than your bill.
In a sense, those of us who are on the other side of this issue have
lost the propaganda battle. Members have managed to move an estate tax
to a death tax, but I have no hesitation to go back to my district and
to talk about what the impact of this repeal would mean for 98 percent
of my constituents, 98 percent.
I will talk about Members coming here yesterday and not being able to
fund Head Start, not being able to fund training; and we are going to
give, 10 years from now, a $50 billion tax cut to the very wealthy in
this country? I will take that battle on any time.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to a distinguished and
respected Member of the Committee on Ways and Means, the gentleman from
Arizona (Mr. Hayworth).
Mr. HAYWORTH. Mr. Speaker, how sad and how cynical that the left can
only embrace the politics of envy. How sad that today they rely on
tired, shopworn old arguments attempting to divide Americans, when we
will see in this Chamber later today a bipartisan majority standing up
for tax fairness intent on putting the death tax to death.
[[Page H4134]]
Our constitutional republic was founded, in part, because the people
in that time stood up against taxation, no taxation without
representation was their rallying cry. Today, all Americans stand up to
say no taxation without respiration, because it is fundamentally
unfair, regardless of your economic station in life, to have this tax
visited upon the American people.
And here is why for the disconnect that seems to affect my friends on
the left when they lament the facts that this affects only 2 percent of
the populace, a little economic primer, friends. Mr. Speaker,
government does not create jobs. The American people, through their
entrepreneurial endeavor and spirit, create jobs; and in the private
sector, we should not inhibit that. That is why the Hispanic Chamber of
Commerce, that is why the Black Chamber of Commerce understands that
the color of economic opportunity in this country is green, in terms of
capital, to create jobs, to create growth and economic opportunity, to
let families hang on to their farms and ranchers and small businesses
and, yes, to succeed.
This is the fundamental difference, Mr. Speaker. We embrace the
principles of prosperity. My friends on the left embrace the politics
of envy.
Mr. CARDIN. Mr. Speaker, I yield 1 minute to a distinguished member
of the Committee on Ways and Means my friend, the gentleman from
Tennessee (Mr. Tanner).
Mr. TANNER. Mr. Speaker, I want to thank the gentleman from Maryland
(Mr. Cardin) for yielding me the time and say that I rise in support of
H.R. 8. The estate tax is an outmoded, inefficient, complicated
subjective tax. The Tax Code needs to be rewritten. This is a good
first step.
This tax applies, as I am told, and I came to this from the
standpoint of a small business and family farmer, over 70 percent of
estate taxes that are filed on estates of $5 million or less, we are
told that this costs 72 cents of every dollar collected simply to
administer it, and for that reason, I support H.R. 8. I thank my
colleague, the gentlewoman from Washington (Ms. Dunn) for her
cosponsorship.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to another respected and
distinguished member of the Committee on Ways and Means, the gentleman
from Florida (Mr. Foley) .
Mr. FOLEY. Mr. Speaker, I applaud the House today for considering
this very important initiative. In the late 1950s, many Hispanic-
Americans came to this country. Cuban-born fleeing Cuba because of the
tyranny of Fidel Castro. He stole their property. He stole their
fortune, and they left their homeland penniless and came often to south
Florida.
They worked hard against daunting odds, new to a country with no
family roots in this Nation. They succeeded oftentimes because of hard
work and a lot of the American freedom and spirit and integrity. Lo and
behold those same, now Americans born in Cuba, are suffering because
estate taxes are depriving their heirs of their heritage.
They left Communism to come to freedom and find our own policies here
in America confiscatory. Now, a lot of people keep talking about the
rich, oh, the rich in America. The rich know how to figure it out. They
have the dollars in their pocket to buy high-dollar denomination
insurance policies or they leave their money to trust. Ted Turner, Bill
Gates, look at the billions they have given away, and they will deplete
the accounts before the U.S. government will get their hands on it.
They are smart. They are sophisticated. They made it their own way.
I started a little business when I was 21. My mother and I and my
family invested a lot of money to build a small business. This debate
is not about my parent. They do not have a large estate, nor is it
about me. I do not either. But never did the U.S. government or the
local government help me with my business. It was always a regulation
of rule, a fee, a permit, a tax, a license, a this, a that and the
other. And we spent, spent money to keep up with government's plans for
us. Never did they be a partner with me, but lo and behold when I die,
they sure join in the parade.
Let me pull money out of your pocket to spend on all kinds of
programs. So, folks, let us get serious. Let us help all Americans and
repeal the death tax.
Mr. CARDIN. Mr. Speaker, I yield 2 minutes to a distinguished member
of the Committee on Ways and Means, the gentleman from Texas (Mr.
Doggett).
Mr. DOGGETT. Mr. Speaker, ``Inherited economic power is as
inconsistent with the ideals of this generation as inherited political
power was inconsistent with the ideals of the generation which
established our government.''
{time} 1030
``If ever our people become so sordid as to feel that all that counts
is moneyed prosperity, ignoble well-being, effortless ease and comfort,
then this Nation shall perish as it will deserve to perish from this
earth.''
Those are the bold words of a Republican, a different mold of
Republican than we find today, one named Teddy Roosevelt who was the
person who first proposed the estate tax in 1906 that this new crowd of
Republicans is so intent on mislabeling as the ``death tax.'' Teddy
Roosevelt's words ring as true at the beginning of this new century as
they did when they were uttered at the beginning of the last. This bill
should rightfully be called the ``Billionaire Protection Act.''
Treasury Secretary Summers said yesterday that this represents ``the
most regressive tax bill'' he has ever seen. That is because 95 percent
of the benefits go to the richest 1 percent of the decedents.
Masquerading as the defenders of small business and family farmers,
this crowd saves its true benevolence every year for Steve Forbes, Ross
Perot, and what Forbes magazine recently described as the ``overclass''
in America, because they have so very much more money than what we
usually consider as being wealthy. This ``overclass'' of the privileged
few will be welcoming this bill with open arms and open wallets.
Yes, we should modify the estate tax to meet the legitimate concerns
of small businesses. The substitute that I support provides family-
owned businesses more estate tax relief sooner than the Republican
proposal will. There is no good public policy reason to eliminate taxes
on the ultra-wealthy in order to meet the needs of family-owned
businesses and farms.
As for the last speaker's comments about charity, remember that the
wealthiest estates give twice as much to charity as they do to the tax
collector. Every charity, every religious and educational institution
in this country will be a loser under this bill. All of this harm to
the Treasury and to our charitable institutions for the sole purpose of
giving those at the very top, the richest few in this country, the
``overclass'' in this country, the benefits of this bill. It is wrong
and it should be rejected.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Thomas), a distinguished and respected member of the
Committee on Ways and Means.
(Mr. THOMAS asked and was given permission to revise and extend his
remarks.)
Mr. THOMAS. Mr. Speaker, I want to thank the chairman of the
Committee on Ways and Means. It was a long, hard road to reach this
day; and we still are hearing repeatedly that some people just do not
get it. The gentleman from Michigan said 98 percent of his constituents
are not going to benefit from the elimination of the death tax.
Why did the polls repeatedly show a majority of Americans support
repeal? It is pretty simple. It is called the American dream.
All one has to do is go to Ellis Island. My colleagues know the
words: ``Give me your tired, your poor, your huddled masses yearning to
breath free.'' Yearning? The dictionary says, Yearning: to have a
strong or deep desire. To be filled with longing. Free. Freedom to
choose, to do what you want to do; freedom from want, from fear.
If someone works and really does not do a good job of developing and
living the American dream, they get taxed once. If someone works hard,
saves, takes care of their family, creates, produces jobs, currently,
in this country, they get taxed twice.
Do my colleagues know what? Those 98 percent who are not going to get
the immediate benefits of this believe in the American dream. They want
to have the opportunity, the freedom, to leave their fruits to their
children. Let us today vote yes on the repeal of the death tax and yes
in favor of the American dream.
[[Page H4135]]
Mr. CARDIN. Mr. Speaker, I yield 2 minutes to the gentleman from
Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Speaker, I agree, there are many
people who have this dream, the dream of not doing very much during
their life except have a good time, and then having been smart enough
to have rich parents who have millions of dollars.
Now, there is an inconvenience if one inherits millions of dollars
today. There will be some tax on them. But if the Republicans have
their way, one will be able to dream one's way into wealth, not because
of any single thing they did other than to be born into the right
circumstances.
This is not a tax on death. Dead men tell no tales, and dead men and
women pay no taxes. This is a tax on those who inherent the wealth that
was earned by others.
Now, there is nothing the matter with that. If people ask my advice,
I would say sure, I think it is a very good idea to have rich
relatives. If I were you, I would try very hard to have rich parents. I
would try very hard to have rich parents, and maybe they will leave you
some money. But the tax is on the beneficiaries of other people's work,
and what a tax repeal.
I think if we were giving a prize for the single worst idea to come
forward from the group that has been rife with them, it would be this.
The idea is this: let us make the Tax Code of America better for very
rich people. Let us give substantial tax relief to the richest people
we can find. Forget about the person making $40,000 a year and paying
Social Security payroll taxes. Forget about all of those other people
paying income tax. We are here to give tax relief to the richest 2
percent of America.
Small business. I must say, every cloud has a silver lining. For
once, some of my friends on the other side have seen merit in trying to
help minority businesses and women-owned businesses, but I would say to
my colleagues, do not do that by using them as a front to give
substantial tax relief, not to the wealthiest people in America, but to
the relatives of the wealthiest people in the America, who may or may
not have done anything to earn it. Yes, people should be able to enjoy
what they earn, and they can even enjoy what other people earn, but not
quite without any taxation at all.
This from a group that says we cannot afford to subsidize
prescription drugs for middle-income elderly people. We have to cut
Pell grants. My Republican colleagues want to help older people as long
as they are very wealthy.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Weller), another distinguished and respected member of
the Committee on Ways and Means.
(Mr. WELLER asked and was given permission to revise and extend his
remarks.)
Mr. WELLER. Mr. Speaker, I want to commend the leadership of the
gentleman from Texas (Mr. Archer) and the gentleman from Tennessee (Mr.
Tanner) and the gentlewoman from Washington (Ms. Dunn) and the
gentleman from Hawaii (Mr. Abercrombie) for their leadership on this
legislation.
The death tax is a bad idea. The death tax is bad social policy. The
death tax is unfair, and it is just plain wrong for the Government to
confiscate the life's work at the time of death. The death tax is also
bad for the environment.
Why are so many major and respected environmental groups supporting
elimination of the death tax? Because environmental groups say that the
death tax is bad for the environment. The death tax encourages suburban
sprawl in Illinois. The death tax encourages the loss of valuable
farmland in Illinois. The death tax destroys valuable open space and
wildlife habitat in Illinois. Let me give an example of why.
I represent the Chicago south suburbs surrounded by some of the best
farmland in the world. This farmland is not only good farmland; but
because of its location, it is prime and ripe for development and
because of its potential price, the sale price for development, it
triggers the death tax, and many children of family farmers in the
areas surrounding the suburbs here in Washington, D.C., or in any major
metropolitan area are forced to sell much or all of the family farm,
just to pay the death tax; and usually it is sold to developers, losing
its use as valuable open space and farmland.
Let us keep the family farm in farming by eliminating the death tax.
Let us protect valuable open space by eliminating the death tax. Let us
protect valuable wildlife habitat by eliminating the death tax.
I say to my colleagues, the death tax is bad for the environment.
Oppose the substitute, support this legislation, vote aye. It deserves
a good, bipartisan vote.
Mr. CARDIN. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Becerra), another distinguished member of the Committee
on Ways and Means (Mr. Becerra).
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding; and I
hope that my colleagues will vote against this measure. We hear talk
about the American dream and how we want to give every American this
American dream. Absolutely, we want to give every American this
American dream. Every American.
When America learns that what we are talking about is not giving ever
American the American dream through this bill, but only 2 percent of
Americans the American dream, because only 2 percent will ever receive
a tax cut in this bill, because only 2 percent of estates ever pay any
estate tax. Forget about 98 percent of America, and it is not any 98
percent of America, it is the 98 percent that falls below the 2 percent
richest Americans, who will receive nothing. Only the 2 percent most
influential and richest will get this break.
This is about as irresponsible as we can get. We are facing a time
recently where we had $300 billion deficits. We are paying more than
$200 billion a year in interest payments on the national debt. We
finally have a surplus; we finally have a chance to be fiscally
responsible. We finally have a chance to talk about perhaps getting
prescription drug coverage for our seniors under Medicare. We finally
have a chance to talk about shoring up Social Security. We finally have
a chance to talk about giving our kids a chance to break away from the
digital divide and have a computer in their classroom.
We could pay for a computer for every child in America, rich or poor,
with the money we are about to give in tax cuts to 2 percent of America
at the top of the ladder. We could provide prescription drug coverage
with the money we are going to spend on this, because the $50 billion a
year it will cost us is more than what we are budgeting than the
Republican Congress is budgeting for prescription drug coverage and
Medicare in its budget for the next 5 years.
Think of it. The budget that we passed out of this House says $40
billion should be allocated for prescription drug coverage for seniors,
millions and millions of seniors. Yet over 1 year, it will take $50
billion out of the Treasury to make up the tax cut that only 2 percent
of the wealthiest Americans will receive. That is not responsible. That
is not what we should do. Let the American dream live for everyone, not
just for 2 percent of Americans.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Hawaii (Mr. Abercrombie), who has contributed toward the development of
this proposal.
(Mr. ABERCROMBIE asked and was given permission to revise and extend
his remarks.)
Mr. ABERCROMBIE. Mr. Speaker, for 1 minute, can we just set aside all
of this rhetorical, divisive language about left and right and who
wants to stiff-arm 2 percent or 98 percent. That is not what this is
about. The whole basis of this law has changed. We have to recognize
that there are middle-income businesses, small businesses all
throughout this country that would benefit from a change; and we all
know that there is an objection with respect to whether or not the
megawealthy may or may not be able to have more advantages than they
have right now.
This is the first step in a legislative process, and we can be
thankful to the gentleman from Tennessee (Mr. Tanner) and the
gentlewoman from Washington (Ms. Dunn) and to the gentleman from New
York (Mr. Rangel) and to the gentleman from Texas (Mr. Archer), who are
excellent legislators. Everyone knows that. They will put together a
package that in the end is
[[Page H4136]]
going to achieve tax equity and fairness for the overwhelming majority
of Americans who deserve it, that is going to help preserve jobs and
that is going to see to it that the small businesses throughout this
country and the jobs that they create are going to be preserved and
protected.
Mr. Speaker, I rise in support of H.R. 8. it is pro-jobs and pro-tax
fairness, and the House should pass the bill by a wide majority.
As many of you know, I have been a long time supporter of working
people and their interests. It is from those perspectives that I come
here today to support H.R. 8 and urge the reform of the federal estate
tax law.
A permanent federal estate tax was first enacted in 1916. there was
clearly a revenue raising need as a result of the U.S. entering World
War I. But there were also philosophical and political motives in that
great fortunes had been amassed during the industrial revolution, and
there was felt to be a progressive public policy objective of stopping
the perpetuation and transmission of the great control that inherently
accompanied vast wealth and estates.
At the time, there was compelling and legitimate concern that vast
fortunes, estates and trust were limiting access to capital by the
emerging middle-class entrepreneurs.
We are now, however, in the 21st Century. Our economy, society and
means of production have radically changed. We are no longer primarily
an agrarian economy, and in many ways we may be nearing the end of
heavy industry phase of our economic development. The outdated laws
governing industry, commerce and society of the early 20th Century must
be changed to reflect the realities of the year 2000 and beyond.
Capital remains a key component of business formulation and
development. It is not, however, being concentrated by entities subject
to the estate tax as in 1916.
Irrelevant and antiquated 19th and early 20th Century laws may be a
hindrance to how our society now functions. Federal estate and gift tax
law fits that category.
My perspective on the issue is that current law diminishes the
capability of small businesses, and the jobs associated with them, to
continue after the death of an owner or owners. Some studies (Heritage
Foundation) have indicated that as many as 145,000 additional new jobs
could be created by repeal of the estate tax law. As much as $11.0
billion in additional economic output could result. The preservation
and expansion of smaller, family businesses will protect jobs, and
generate and expand the number of new jobs.
For example, I represent the State of Hawaii, a state dominated by
small businesses. Plantation agriculture has virtually ended and with
the demise and economic dislocation associated with economic change, we
are working hard to diversify Hawaii agriculture. This means many more
smaller scale farmers growing specialty and niche crops instead of
millions of tons of sugar. The middle class in Hawaii has developed
from small business origins, and we now have great hope that a new
generation of entrepreneurs will help sustain the economy through the
new farming opportunities available for the first time in generations.
I want to help preserve and develop those elements in Hawaii and in the
American economy and society that generate millions of jobs.
Regarding tax fairness, an equally compelling case is made that the
wealthiest do not pay their fair share of estate taxes. The Tax Code
has deliberately been riddled with exemptions and exceptions that are
ruthlessly and thoroughly exploited by tax attorneys specializing in
the preservation of inherited wealth. There is an entire body of tax
law devoted to estate and gift tax avoidance and minimalization.
Tax attorneys, I assure you, are talented and hard-working. The
result is the majority of estates paying estate taxes are valued at
$5.0 million and less. These are not the Rockefellers, Vanderbilts,
Carnegies and J.P. Morgan robber barons the 1916 law was enacted to
curb. Huge fortunes have for generations been sheltered with
sophisticated, complex tax machinations. It is family farm and small
businesses owners who are being penalized when trying to pass down
assets to new generations to keep middle-class businesses in operation
and generating employment. I can assure you I know of no small
businesses in Kaneohe, Makiki, Waianae or Mililani, Hawaii that resort
to multi-generation skipping trusts in order to keep a bakery or a
delivery service in operation.
Lastly, there is a human element in this debate that must be noted.
One of my constituents, Steve Lee, is an estate attorney and planner in
Honolulu. Mr. Lee's father inherited a few apartments from his parents
some time ago. Mr. Lee's grandparents worked hard for years, acquiring
the apartments as a means of assuring retirement income. Now his father
is spending hours trying to figure our how to keep the property intact
to pass it along to Mr. Lee and his brother. The Lees are middle-income
in Hawaii. The value of real property acquired years ago, however, has
been greatly inflated and the Lee brothers will face the need to
liquidate at least part of the property in order to pay estate taxes in
9 months. The Lees justifiably feel they are being penalized for having
kept their property intact within their family.
Mr. Speaker, our current estate tax fails to meet the goals we
expect. It is overly complex to the point of being arcane, the burden
on those upon whom it falls is unfair and inefficient.
Passing H.R. 8 today is the first major step. As we move through the
legislative process, however, we will also seriously consider proposals
that would provide interim, transitional relief. We will seriously
consider any inequities that total elimination might engender. We will
address Presidential objections. We can forge a bill acceptable to all
who want tax equity.
Consequently, I look on H.R. 8 as both tax fairness, and pro-jobs and
I am pleased to be associated with John Tanner, Jennifer Dunn, Bill
Archer, Eva Clayton and others in helping move estate tax reform
legislation through Congress.
I urge the House to pass the bill, and bring more fairness to the Tax
Code.
Mr. CARDIN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
California (Mr. Sherman).
(Mr. SHERMAN asked and was given permission to revise and extend his
remarks.)
Mr. SHERMAN. Mr. Speaker, yesterday we slashed money for education
for teachers, for after-school programs, for Head Start. Today, they
want to cut $50 billion per year from Federal revenues. Two percent of
American families even pay this tax. Three percent of those involve
family farms and family businesses, so only 6 out of every 10,000
families fit into the category of having a family farm or family
business affected by this tax.
The Democratic bill does far more for those family farms and
businesses. Immediate relief. A bill that will be signed into law. But
only the Republican bill provides the billionaire's tax relief act. Not
one penny for those who make $6 an hour or $10, not relief at the
democratic level for small businesses, but huge relief for
multibillion-dollar fortunes.
Furthermore, the Republican bill will slash major endowments for
colleges, universities, and conservation programs. Those folks will be
here asking for Federal help, and we will not be able to give it to
them because we will have cut revenues by $50 billion. The Republican
bill even contains a hidden provision which will increase income taxes
on widows. There are plenty of reasons, 50 billion reasons, to vote no
on the Republican bill and yes on the Democratic substitute.
{time} 1045
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio
(Mr. Traficant).
(Mr. TRAFICANT asked and was given permission to revise and extend
his remarks.)
Mr. TRAFICANT. Mr. Speaker, in America we pay income and capital
gains tax; investment, business, pension tax, luxury tax, property tax,
sales tax, fuel tax. We even pay a surtax, and once, a retroactive tax.
We are taxed coming and going.
If that is not enough to glorify a 1040, we even pay a death tax in
America. Beam me up. Once again, we hear the same old story. We come to
the floor and beat up on the rich.
I think it is time, Mr. Speaker, to stop the class warfare in
America. Why should families who achieve in life be destroyed in death?
Why should farmers have to surrender their farms to the government and
not pass their farms on to their kids? Tell me and answer that
question.
Mr. Speaker, my family was very poor, really. But my dad never worked
for a poor man. And tell me, who hires the workers in America? Is it
the guy on the street corner, or the people who achieve and have
success and make something from the great American dream?
I support the gentleman from Texas (Mr. Archer) today, because I
believe that in America today, from womb to tomb, from farm to harm,
the American people are literally taxed off, ripped off by a Congress
that sees nothing but revenue.
I yield back the fact that I will not only vote to put the death tax
to death, I also recommend to the chairman that we kill the income tax,
abolish the
[[Page H4137]]
IRS, and replace it with a 15 percent national retail sales tax, and
give some tax freedom to the people of the United States of America.
I want to commend the chairman and commend those Democrats that are
making some common sense.
Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
Let me just remind my friend from Ohio, Mr. Speaker, that only 3
percent of the taxable estates have family-owned businesses or farm
assets of any significance. That is less than .06 percent of all of the
estates, and the Democratic substitute will deal with that problem in a
far less costly way.
Mr. Speaker, I yield 2 minutes to the gentleman from Maine (Mr.
Baldacci), a member of the Committee on Agriculture.
(Mr. BALDACCI asked and was given permission to revise and extend his
remarks.)
Mr. BALDACCI. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, as a small business person and a former member of the
Committee on Small Business, I am very aware of the burden under which
many entrepreneurs and working families must operate. I have a family
business, and I understand the concerns of those who want to pass their
businesses on to the next generation.
I am also on the Committee on Agriculture, and I know my family farms
in Maine, many of which are in the same families for generations, need
to have relief. That is why we in this Congress were able to pass
measures to reduce their tax burden. In such a case, 98 percent of the
estates and family farms and farm businesses and small businesses have
been exempted.
As a matter of fact, each member of a married couple is eligible for
the exemptions we passed, which can be twice the initial amount, up to
2 million by 2006.
Having said that, I understand the importance of living within our
means and planning for the future. The estimated cost for repealing
this completely with H.R. 8 is over $104 billion in the first 10 years,
or $500 billion over the next 10 years, blowing a hole in the budget
and our fiscal responsibility, and our ability to reduce interest rates
and protect the economy, and our ability to help all people who want to
be able to retire with a strong social security, being able to
modernize Medicare with prescription drugs and provide needed
educational assistance for those that want to climb up the ladder, and
provide health care for all of America's children.
We are not going to have that opportunity because, according to the
Joint Economic Tax Committee, it estimates that only 2 percent of all
estates will pay estate taxes, and only 3 percent of that 2 percent are
family-owned businesses, 776 family businesses and 642 family farms.
For that, we are mortgaging everyone's future.
The Rangel substitute provides a serious consideration of immediate
reforms, where the bill that is being proposed now, we would have to
wait until 2010 before any family business would be able to take
advantage of that.
So this is a good substitute and it does it across-the-board. It does
not mortgage our country's future.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Sam Johnson), a highly distinguished and respected member of
the Committee on Ways and Means.
(Mr. SAM JOHNSON of Texas asked and was given permission to revise
and extend his remarks.)
Mr. SAM JOHNSON of Texas. Mr. Speaker, I ran across an article out of
the Dallas News this morning. I just have to tell Members about this.
David Langford, who is executive vice president of the Texas Wildlife
Association, said, ``Since 1851, my family has worked the land in the
Texas Hill Country. Through ups and downs of the past 148 years, we
have run flour mills, farmed, ranched, and offered hunting and fishing
opportunities.
``Our land also serves as a habitat for many species of birds. . . .
As a result, my family and I consider ourselves stewards of precious
natural resources.
``But as is the case for much of the wildlife habitat in this
country, the estate tax threatens to tear it apart. The need to pay
large estate tax bills often forces families to sell or develop
environmentally sensitive land. The estate tax is the No. 1 destroyer
of wildlife habitat in this country. . . .
``But for those of us who are stewards of wildlife habitat, the
argument goes much deeper than the issue of business and money. Yes,
families suffer financially,'' and his did. ``When wildlife habitats
disappear, they disappear forever. We aren't a bunch of fat cats trying
to hoard our assets. We are private citizens trying to preserve an
irreplaceable resource for the enjoyment and benefit of generations to
come.''
Mr. Speaker, I think most Americans agree that we need to get rid of
this. Americans simply do not believe the IRS ought to operate a toll
booth on the road to heaven.
Enough is enough. It is time to repeal the taxes on our American
values. It is time to bury the death tax, giving a new birth of freedom
to the next generation of farmers, ranchers, and small businesses.
[From the Dallas Morning News, Nov. 10, 1999]
Estate Taxes Threaten Wildlife Habitats
(By David Langford)
For many of us trying to preserve and protect our wildlife
habitat, the federal estate tax is a deadly predator.
Since 1851, my family has worked the land in the Texas Hill
Country. Through the ups and downs of the past 148 years, we
have run flour mills, farmed, ranched and offered hunting and
fishing opportunities.
Our land also serves as a habitat for many species of
birds, including two endangered migratory songbirds the
golden-cheeked warbler and the black-capped viero. As a
result, my family and I consider ourselves stewards of
precious natural resources.
But as is the case for much of the wildlife habitat in this
country, the estate tax threatens to tear it apart. The need
to pay large estate tax bills often forces families to sell
or develop environmentally sensitive land. The estate tax is
the No. 1 destroyer of wildlife habitat in this country.
Although we have managed to hold our land together, it
hasn't been easy. Before my mother died in 1993, we did
everything we could to protect our family's land. Like
millions of other family businesses, we paid accountants, tax
attorneys and estate planners to help manage our assets in
ways to avoid the tax, but it still came to this.
In order to pay the estate taxes and keep the land together
when my mother died, we had to sell almost everything she
owned, including her home. My wife and I had to sell nearly
everything we owned, including our home, and move into a two-
bedroom condominium. We also had to borrow money for 35 years
from the Federal Land Bank.
Because the value of the land has increased since 1993, if
we were killed in a car accident tomorrow, my children would
owe more inheritance taxes than the amount I originally had
to borrow to pay mine. But that isn't the end of the story.
Not only would they pay more taxes than me, but they still
would inherit my 35-year note that they would have to
continue to pay.
Could my children then keep the land? The short answer is
no. It probably would become a subdivision. Like thousands of
other hard-working, middle-class families, our children and
grandchildren would be at the mercy of the punishing estate
tax, which demands up to 55 percent of their assets at the
time of death. They simply don't have the cash.
Private land stewards all over the country are being
ravaged by the estate tax. Taxpaying citizens are being
driven off the land. What is accomplished by breaking up
natural habitats? The benefit to the federal government is
negligible. The estate tax raises barely more than 1 percent
of federal tax revenue. Many economists have concluded that,
what you consider the revenue lost from tax avoidance
strategies, the estate tax contributes minimal revenue to the
federal budget.
Congress has an opportunity to repeal the death tax or at
least reduce its crushing rates. No other act of Congress
this year could provide more help to family-owned businesses.
But for those of us who are stewards of wildlife habitat,
the argument goes much deeper than the issues of business and
money. Yes, families suffer financially mine certainly has
but the real loss is one that affects the entire country.
When wildlife habitats disappear, they disappear forever. We
aren't a bunch of fat cats trying to hoard our assets. We are
private citizens trying to preserve an irreplaceable resource
for the enjoyment and benefit of generations to come.
David K. Langford of San Antonio is executive vice
president of the Texas Wildlife Association.
Mr. CARDIN. Mr. Speaker, I yield 2 minutes to the gentleman from
Massachusetts (Mr. Olver).
Mr. OLVER. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, small family farmers and business owners in my district
deserve tax relief. I support the Democratic substitute legislation
that excludes up to $4 million for couples owning farms or small
businesses. But this estate tax bill really should be titled ``the
Billionaire Protection Bill.''
This Billionaires Protection Act is a terrible solution to an easily
remedied
[[Page H4138]]
problem, but it does tell America exactly what Republican priorities
really are. Before anything else, the Republican leadership would give
a huge, reckless, and dangerous backloaded tax cut, more than half of
which goes to the 60,000 wealthiest families among our 60 million
families.
Do Republicans really believe that the Bill Gates, the Steve Forbes,
the John Corzines, need $25 billion of tax cuts every year? Does anyone
listening and watching today believe they need $25 billion of tax cuts?
The Republican leadership would give this multi-billion dollar tax
cut before limiting class size to 18 for more than 3 million children;
before establishing a prescription drug benefit in Medicare for 13
million American senior citizens who cannot afford the expense of drug
coverage; before raising the minimum wage for millions of Americans
working full-time for less than $11,000 per year; before paying down
the national debt, so interest rates will go down for all American
homeowners; before extending social security so that our generation and
our children's generation will have a secure base for retirement.
It is a stunning revelation to know that the Republicans' last
priority is a huge tax cut for the super rich. Vote for the substitute
and against this give-away.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Kolbe). The Chair would remind all
Members participating in debate to direct their remarks to the Chair
and not to the viewing audience.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Kentucky (Mr. Lewis), another distinguished and respected member of the
Committee on Ways and Means.
Mr. LEWIS of Kentucky. Mr. Speaker, many of those on the other side
of this debate that are against this tax relief keep talking about a
$50 billion cost to the government. It is going to cost the government.
My question is, whose money is this? It is the farmer down in
Kentucky and the States across the country that get up every morning
before the sun comes up, and that never get in from the fields many
times until way after the sun has gone down, that put in 40, 50, 60
years of their life of hard work in the fields to provide something for
the next generation, for their sons and for their daughters.
It is their money. They are the ones who are working to earn it, to
provide something for their heritage, something that will allow the
farm produce in this country to continue.
As my friend, the gentleman from Illinois (Mr. Weller) mentioned a
little while ago, urban sprawl is eating up the farmland because the
hard work of farmers is going back into taxes. That is totally unfair.
Mr. CARDIN. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Texas (Mr. Edwards).
Mr. EDWARDS. Mr. Speaker, if being fiscally irresponsible and unfair
to middle class American families were crimes, passing this bill would
be a felony.
Under this bill, 90 percent of American families will get nothing,
not one dime, except for a larger national debt. But one-thousandth of
1 percent of America's richest will get billions in tax cuts.
Republicans are saying on one hand, we cannot afford to get soldiers
off of food stamps, but let us give billionaires a massive tax cut.
They are saying, we cannot afford to keep our health care promises to
veterans and military retirees, but we can afford a $50 billion tax cut
to the wealthiest 2 percent of Americans.
Republicans say, we cannot afford decent Medicare prescription drug
programs for seniors, we cannot afford to enforce nursing home
standards, we cannot afford to protect struggling rural hospitals from
Medicare cuts in this Congress, but we can afford to give Bill Gates,
Ted Turner, and Steve Forbes millions or billions in tax cuts.
The Democratic substitute values all Americans, not just a privileged
few, by protecting family farms and businesses while paying down the
national debt. Those are America's values.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Illinois (Mr. Manzullo).
Mr. MANZULLO. Mr. Speaker, I was there when the auctioneer's gavel
fell and sold half of the family farm of a couple that I represented in
Ogle County, Illinois, as their kids sat there and went.
Let us not talk about the Bill Gates and the Steve Forbes, let us
talk about those people, farm people losing their farms because
government wants more money to spend on more programs. It is not Steve
Forbes.
Let us talk about the Cross family, dealing with the death of the
grandmother and then the death of their mother, trying to desperately
hang onto the family farm. These are not rich people. They are a small
percentage of people, but they are real people with real names and real
auction sales that deprive their children of the ability to carry on
the family farm. Those are the names.
Mr. CARDIN. Mr. Speaker, it is my pleasure to yield 1\1/2\ minutes to
the gentleman from Mississippi (Mr. Taylor).
Mr. TAYLOR of Mississippi. Mr. Speaker, what is interesting today is
what is not being said. Our Nation is $5.7 trillion in debt. Five
trillion dollars' worth of that debt was acquired by Congress in our
lifetimes.
{time} 1100
Most of it since 1980. We are squandering a billion dollars a day on
interest on that debt.
The Joint Chiefs of Staff testified that we have a $100 billion
shortfall in our military. The Shows bill which would provide relief to
our veterans and military retirees has 300 cosponsors, but the
Republican leadership will not bring it to the floor because they say
we do not have $5 billion a year to cover that cost.
So I have to admit I find it a bit unusual that the Republican
leadership can find $50 billion a year to give the wealthiest 2 percent
of all Americans a free ride on this. I hope someone will explain that.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Nebraska (Mr. Terry).
Mr. TERRY. Mr. Speaker, as a cosponsor, I rise in support. This act
is about more than economic policy or numbers. It is about fairness. It
is about family preservation. We are trying to protect their heritage
and their culture.
In Nebraska, family farms date back to the great-great-grandparents
who were pioneers, yet these taxes force smaller farms to sell to the
Ted Turners of the world. And in Omaha, my hometown, second and third
generation family shops like print shops or the Hispanic grocery store
where they migrated here 40 years ago to live the American dream which
were built with the family's sweat and the toil and the sacrifice, must
be sold now upon the death of the father or the mother to pay the death
taxes.
This act is about fairness. It is about preserving family history and
culture. Please preserve this family culture. Vote for this bill.
Mr. CARDIN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Texas (Mr. Turner).
Mr. TURNER. Mr. Speaker, I come from a district where the average
household income is just over $21,000. We know that less than 2 percent
of all American families ever owe an estate tax. I can say that in the
second district of Texas, it is less than that.
H.R. 8 targets the richest 2 percent of the families in the country
and if it were to pass, it would amount to a $2 billion to $3 billion
tax break just for the 400 richest Americans. It would cost over $50
million a year when fully phased in.
Mr. Speaker, I say it is simply not right to give the very richest
billionaires a $50 billion tax break while everyone else is left to
figure out how to pay off the national debt and how to save Social
Security.
As the chart I have to my right indicates, the Democratic substitute
gives even more relief to the smaller estates. In fact, the Democratic
alternative gives the greatest tax relief to the smallest estates at a
fraction of the cost to the Treasury.
Look here, a $2 million estate of the husband who dies and the family
worth $4 million, under House Bill 8, that family owes $229,800 in
estate taxes; under the Democratic substitute, there is no estate tax
due. That is if we have a family farm or small business. If we do not
happen to be a family farmer or have a small business, we still get
more relief under the first 5 years under the Democratic plan than
under H.R. 8.
[[Page H4139]]
Mr. Speaker, I say this is the best plan. It is fiscally responsible
and gives the greatest tax relief to the smaller estates.
COMPARISON OF ESTATE TAX OWED ON $2 MILLION ESTATE
------------------------------------------------------------------------
House bill Democratic
Year 8 substitute
------------------------------------------------------------------------
Small business or family farm:
2001...................................... $229,800 0
2002...................................... 229,800 0
2003...................................... 222,800 0
2004...................................... 208,800 0
2005...................................... 188,200 0
All others:
2001...................................... 491,300 $316,000
2002...................................... 491,300 316,000
2003...................................... 456,800 316,000
2004...................................... 375,800 316,000
2005...................................... 303,700 316,000
------------------------------------------------------------------------
Source: Congressional Research Service.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
California (Mr. Calvert).
Mr. CALVERT. Mr. Speaker, I rise today as a former small business
owner, a family business, and a strong supporter of H.R. 8, the Death
Tax Elimination Act. This bill finally phases out the Federal estate,
gift, and generation-skipping transfer tax commonly referred to as the
``death tax.''
Small businesses are a foundation of the American dream. My father,
after he served in World War II, started a small coffee shop chain,
started with one restaurant and built it up. My father passed away and
as a family, we are facing this estate tax, as many families in this
country face this tax. It is unfair, it is un-American, and we have an
opportunity to end this tax today.
Mr. Speaker, it is disgraceful that we continue this practice, and I
am looking forward to a vote today that will finally start us down the
road to ending this tax which hopefully will be signed into law.
Mr. CARDIN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Massachusetts (Mr. Capuano).
(Mr. CAPUANO asked and was given permission to revise and extend his
remarks.)
Mr. CAPUANO. Mr. Speaker, there are a couple of questions that have
been raised in my mind since I have been listening to the debate. I
guess if this tax is a bad tax because everybody earned the money, that
is true. That is true for every single tax we have. Of course Americans
earn the money. It is no different here than in the income tax or sales
tax or any other tax.
If the argument is valid, it is valid for every tax. Let us just get
rid of them all and base this country's entire economic system on
gifts. It is not going to happen, my colleagues on the other side of
the aisle do not propose it, so the argument does not hold water.
I also hear today about how difficult it has been on a few
individuals. Of course, every system has problems. In general, though I
have also heard many comments about different businesses that are
second generation, third generation, fourth generation businesses. How
did they make it? How did they get through the estate tax if it is so
bad?
Let us tell the truth. The Democratic proposal deals with the
problems that are on the table. Everyone here wants to deal with them.
It will cut from 2 percent. If the Democratic proposal is adopted, it
will be 1 percent. We take almost half of the people today and not tax
them at all. On top of that, when we are finished if the Democratic
proposal is passed, the average estate, the average estate that would
be taxed would be worth $3.5 million. And they would not be taxed at 55
percent. Anybody who knows anything about taxation knows the difference
between marginal taxation and effective taxation. The effective tax
rate, the thing that is really paid by people, currently is about 20
percent. It is not 50 or 55 percent as everyone keeps saying because
that is a nice number to use. But it does not mean a thing. It is 20
percent.
If the Democratic proposal is passed, it would be 16 percent. The
Democratic proposal would still leave the average taxpayer with $2.7
million of that 1 percent of people.
Mr. ARCHER. Mr. Speaker, I yield the balance of our time to the
gentleman from California (Mr. Cox) a member of the Republican
leadership.
Mr. COX. Mr. Speaker, when I first introduced legislation to repeal
the death tax in 1993, the Democratic leader was seeking to increase
death taxes. But slowly but surely over four congresses, we have put
together a consensus of Democrats and Republicans in this body and the
other body behind the simple notion: the death tax, even though it is
intended to soak the filthy rich, does not really fall on them. It
falls on low-wage workers.
Mr. Speaker, people who fall in the category of the top 2 percent
richest Americans, names that we have heard during this debate like Ted
Turner or Bill Gates, will not benefit from the passage of this
legislation because they will not pay the death tax. To a certainty,
the one person who will not pay the death tax is the rich dead person.
But beyond that even those who survive, through estate planning,
through all manner of complicated trusts and avoidance schemes, not to
mention lifetime gifts, successfully avoid most of the burden of this
tax.
The real burden of this tax falls on the low-wage worker, the woman
who works for a business or a farm or a ranch that is family owned,
because every day she does not know what happens when the founder dies.
If part of that business has to be sold off or all of it has to be sold
off to pay the tax man as so often happens, then people lose their
jobs. Many more people than there are dead rich persons at whom this
tax is aimed. And when they lose their jobs, their tax rate is 100
percent. It is for those people that we are passing this legislation
today.
In California, we put this question to a vote of the people. Even
though the left raised the battle cry that this was a tax break for the
rich, nearly two-thirds of Californians voted to repeal our death tax
in its entirety because they understood where the real burden of this
tax falls. It is the right thing to do today for the working people of
America, and I congratulate the leadership of this Congress, the
gentleman from Texas (Chairman Archer), and all of the Democrats and
Republicans who have come together to make this happen. We hope that
this time the President will sign it into law.
Mr. CARDIN. Mr. Speaker, I yield the balance of our time to the
gentleman from Georgia (Mr. Lewis), a distinguished member of the
Committee on Ways and Means.
Mr. LEWIS of Georgia. Mr. Speaker, I rise today in support of the
motion to recommit to be offered later by the gentleman from Texas (Mr.
Doggett). The motion simply says that section 527 political
organizations that fail to disclose their donors will be subject to the
gift tax.
It is time to fix our broken system of financing elections. This
motion is an important step toward that goal. It would close a huge
loophole by requiring simple disclosure by secretive political
organizations and groups. The American people have a right to know.
They have a right to know who is funding political campaigns in this
country. They have a right to know who is trying to influence their
votes. The American people have a right to a free and open election
process.
Mr. Speaker, it is time to close this loophole. It is time to get rid
of the secrecy. It is time to fix this mess.
The other body had the courage and voted with raw courage on
yesterday to close this loophole. It is time for the House to do the
same. I urge all of my colleagues to support the motion to recommit.
Mr. SANFORD. Mr. Speaker, I rise in support of Chairman Archer's
efforts to reform the estate tax. And I say reform, rather than repeal,
because at the heart, that's what I think we're talking about here. I'm
sure Chairman Archer would disagree emphatically with my point. But
given the way our political process works, I think that today's vote
represents the starting point in negotiation over the estate tax. By
staking out a position of repeal, as it works its way through the
political body, what we're really talking about is change. And the
question I think we all need to ask ourselves is to what degree. While
I am in favor of this vote because it stakes the position of the need
for change, the reason I don't think that I would ever be in a position
to support total repeal of the estate tax is tied to three things:
history, the value of work and the belief in meritocracy, and, finally,
the power of compound interest.
When you look through the pages of history, you see that anytime
there's been extreme disparity of wealth, you've seen political
problems. In short, the Banana Republics of South America are
demonstrative of the fact that a few families holding all the wealth
doesn't lend itself toward democratic rule. In fact, if you stop and
think about it, would it be good for
[[Page H4140]]
our form of government, if out of the 270 million people that make up
America, 99 percent of the wealth was held by four families? I think
undoubtedly, most people would say no, not a chance. And that
illustrates the point that I think intuitively all of us know--that
extreme wealth concentration isn't good for our form of government.
Two, I'd say there's a real value to work and meritocracy. I think
that one ought to put on their jeans and go to work. It's good for the
individual and it's good for society as a whole. In fact, Republicans
have repeatedly made that very argument when they talk about welfare
recipients. Our Founding Fathers were very deliberate about not having
kings and queens, and yet if you have a couple of families that can
hand on huge levels of wealth, tax free, generation after generation,
what you develop is an aristocratic class that does nothing more than
eat from silver spoons and play polo. I think the reverse would be good
to have a merit-based system, wherein one can go out and earn as much
money as they're able over the course of their lifetime with very
little from the standpoint of government regulation or government
taxation interfering with those efforts. Beyond a certain point though,
families ought to be brought back to a neutral starting zone, with each
new generation given that shot at making it to the top. I say that as
one who's voted to cut virtually every form of government spending.
Unfortunately, Congress as a whole is not willing to do that, and we
have to pay for those government services that people so consistently
vote for around this place. I'd rather not see the burden on the
shoulders of people working and striving to develop new things. I'd
rather see that, again, at the end of the day after one has succeeded,
without government taxing them heavily on their rise to the top.
Which brings me to my third point, the power of compound interest. I
do think the estate tax needs to be substantially reformed, and I'm
talking about a very large limit here. One ought to be able to hand off
perhaps $250 million or $500 million tax free to their children, should
they so choose. But you shouldn't have a Bill Gates level of wealth
that's $50 billion handed tax free to the next generation. For this
family, within a couple of generations, compound interest could
concentrate perhaps a trillion dollars of net worth.
So in the end that's where I am. Let's substantially repeal the
estate tax; let's reform it mightily, raising the limit in excess of
$100 million of tax free inheritance, to be handed on from one
generation to the next. But let's not completely eliminate it, because
extreme concentrations of wealth handed tax free from one generation to
the next is not only bad for the individuals in question, but certainly
bad for our system of government.
Ms. PELOSI. Mr. Speaker, yesterday we began debate on a bad Labor/
HHS/Education Appropriations bill, a bill that cuts $2.9 billion from
education services; cuts $1.7 billion from labor with cuts to workforce
development and safety investments; and cuts more than $1 billion from
critical health programs. And next week we will be forced to vote on
this bill that undermines so many of our nation's priorities.
Why? Because the Republican House leadership passed a bad Budget
Resolution that puts tax cuts for the wealthiest Americans above
investments to promote America's education, workforce, and health
services. Their $175 billion tax cut exceeds the projected budget
surplus and requires deep cuts in non-defense discretionary
appropriations.
And here we are again, voting on a measure that would provide over
$50 billion to the wealthiest 2 percent of taxpayers. How much is
enough? When will Republicans be satisfied with the amount of money
they have given to the wealthy, and turn their attention to the
majority of Americans who want a good education, a strong work force,
and a healthy future?
This bill will cost $50 billion per year when fully phased in. This
monstrous hole in the federal budget will undoubtedly translate into
cuts from areas that the American people care about, just as the
proposed $175 billion Republican tax cut translated into cuts in
yesterday's proposed Labor/HHS/Education Appropriations bill.
When we prioritize tax cuts over health, education, and labor, we
make sacrifices, and these sacrifices affect everybody. The repeal of
the estate tax does nothing for working families. Most American
families would not receive a single dollar of tax relief from this
bill. So I want the American people to know what they are sacrificing
in order to provide a tax cut to the wealthiest two percent of their
fellow citizens.
Republicans have proposed cutting $1 billion from targeted
investments in education to improve teacher quality and recruit new
teachers, denying afterschool services to 1.6 million kids, and
eliminating HeadStart assistance to 50,000 kids.
They have also proposed cutting NIH $439 million below current
services and cutting $16 million from Clinton's request for battered
women's shelters.
These are the kinds of sacrifices that Americans are being asked to
make in exchange for a tax cut that would give $300 billion to the 400
richest Americans. $300 billion is enough to pay for a prescription
drug benefit for seniors for 10 years!
The Republican majority placed the needs of big business over working
people yesterday by voting to once again delay the implementation of
new ergonomics regulations which protect working people from repetitive
motion injuries. And here they are again asking working families to
make sacrifices so that the wealthy can reap benefits.
Slowing our progress in health, education, and labor in order to make
room for tax cuts for the wealthy does not fit with our national
priorities.
Democrats have proposed a fiscally responsible substitute that
targets tax relief to farmers and small business. I urge my colleagues
to support this alternative.
Mr. CROWLEY. Mr. Speaker, hard working Americans should not be forced
to liquidate their holdings and sell off the businesses their fathers
or grandfathers started in order to pay their estate taxes. The estate
tax, while only affecting a relatively small number of people, does
harm small businesses, family farms and ranches. I am not talking about
the wealthiest Americans; I am talking about hard working Americans.
This relief needs to be immediate. While I support the principles of
H.R. 8, it does not help hard working families now, or even next year,
it will not help 10 years from now. Additionally, it will take from our
surplus that could be spent on shoring up Social Security, implementing
a prescription drug benefit for seniors and improving education. H.R. 8
really helps the wealthiest Americans.
In today's economy, one million dollars does not make a millionaire.
On paper, a family business may be worth six million dollars with
property and buildings, but the family is really struggling to survive.
The Rangel substitute addresses the inflation in our economy while
still being fiscally responsible. The Rangel substitute increases the
special exclusion to the estate tax to two million dollar per person.
It provides further relief and simplifies the estate tax for this group
by allowing any unused portion of the exclusion to be transferred to
the surviving spouse, making the total exclusion four million dollars
to eligible farm and small business owning couples. Importantly, the
Rangel alternative increases the general exclusion for the estate tax
next year from $675.000 to $1.1 million. H.R. 8 would take ten years to
make this increase.
Additionally, we all agree the top marginal tax rate of 55% is too
high--taking away more than half of any estate. The Democratic
substitute lowers marginal tax rates by twenty percent across the board
in combination with converting the federal estate tax credit for state
death tax credit into a deduction.
I believe the Rangel substitute will provide relief to the small
businesses in my district as well as farms and ranches across the
country. At the same time, it allows us to retain our budget surplus to
help Social Security, Medicare and Education.
I support the Rangel alternative. I oppose the fiscally irresponsible
H.R. 8 and urge my colleagues to vote in support of the Democratic
alternative.
Mr. FRANKS of New Jersey. Mr. Speaker, today, with my support, the
House passed legislation (H.R. 8) to eliminate the Death Tax.
For too long, exorbitant tax rates have made it difficult for
Americans to pass their savings onto their children, and for small
businessmen and farmers to keep their enterprises within the family.
That's why I cosponsored and voted in favor of the Death Tax
Elimination Act (H.R. 8), which would phase out the estate and gift tax
over a period of 10 years.
It is my hope that phasing out the death tax will make it easier for
individuals and families to accumulate savings for future generations.
In addition, during debate on this important legislation, a motion
was offered to address another important issue--campaign finance
reform. I supported this motion.
Congress's failure over the years to address the issue of campaign
finance reform hurts all of us. It undermines public confidence in this
institution and casts a cloud over every action we take in this House.
I have been actively fighting for campaign finance reform in this
House for a number of years--from authorizing my own Independent
Commission Bill to supporting a ban on soft money through Shays-Meehan
to supporting today's motion to close the 527 loophole.
Recently, there has been an increase in anonymous campaign
expenditures by third parties. Many of these organizations are
classified by Section 527 of the tax code. These ``527'' organizations
are currently free to participate in our electoral process, but are not
required to disclose to the American voters from where their funds
originate.
To establish disclosure requirements for individuals and
organizations who wish to take
[[Page H4141]]
an active role in affecting the outcome of federal elections is just
plain common sense. Individuals and organizations who strongly believe
in an issue or a candidate and are willing to back them up with their
financial resources should not be allowed to hide behind a loophole.
Congress must act an legislation requiring disclosure for any group
who wishes to participate in federal elections in order to help build
greater public confidence in the integrity of our federal electoral
process.
Mr. ROEMER. Mr. Speaker, I rise in support of H.R. 8, which provides
for the elimination of the federal estate tax. By removing one of the
most unfair, complicated and inefficient provisions on the tax books,
we can provide critical tax relief to our families, small businesses
and farms. I strongly believe that a person who works hard, pays taxes,
and saves money should not be penalized with an onerous tax upon his or
her death. Every American deserves to know that their heritage,
livelihood and the sum of their life's work will be passed on to their
children.
The estate tax undermines the traditional principles of our nation--
hard work, savings, and fairness. There are too many cases of family-
owned businesses and farms in Indiana that have been forced to sell
their estates because it was too expensive to pay the estate tax. More
than 70 percent of family-owned businesses are not passed on to the
next generation, and 87 percent do not make it to the third generation.
Even as the estate tax creates such severe unintended consequences, it
does not even succeed at its intended purposes. the estate tax brings
in less than 1.4 percent of total federal revenues, but enforcement of
the tax costs the government 65 cents for ever dollar it raises. This
is a waste and simply unfair to hard-working American taxpayers.
I also support the Democratic alternative, which provides even more
relief to small businesses and farmers by providing targeted and
immediate tax breaks. For example, the Democratic alternative allows a
married couple to pass on their family farm or small business intact
with no estate tax whatsoever if it is worth up to $4 million. Because
the Republican bill is phased in over ten years, a couple passing on
their farm or small business in the near future would avoid more tax
under the Democratic substitute. It also lowers estate tax rates 20%
across the board. This alternative is a fiscally sensible alternative
that targets relief to farmers and small businesspeople while
protecting our ability to pay down the national debt and shore up the
long-term future of Social Security and Medicare.
Mr. Speaker, since the Democratic alternative is not expected to be
passed by the House, I will vote for H.R. 8 because I do not support
the status quo as it concerns the estate tax. Hard working American
taxpayers deserve a change now, and for these reasons, I strongly
encourage my colleagues to support this legislation.
Mr. KIND. Mr. Speaker, I rise today in opposition to H.R. 8, the
Death Tax Elimination Act of 2000. The federal estate tax has come
under a great deal of scrutiny because of its economic effect on family
farms and small businesses. I support the effort to protect these farms
and businesses but, unfortunately, H.R. 8 does not effectively target
small businesses and farms. Rather, it would enable the wealthiest 2
percent in our country to pass vast fortunes to their heirs without a
penny of tax, while working families are taxed on every dollar they
earn. Further, Congress would be passing a greater share of the burden
of saving Social Security and Medicare and paying off the $5.7 trillion
national debt to all American children.
H.R. 8 would initially reduce and then fully repeal the federal
estate and gift tax over a 10-year period. This bill would cost $28
billion over five years and $105 billion over ten years. The full
repeal, however, does not take effect until 2010. In that year, the
Congressional Budget Office estimates that estate and gift tax will
generate nearly $50 billion. As a result, the revenue loss in the
second ten-year period explodes to more than $500 billion at a time
when our country can least afford it as baby boomers will be retiring
and Social Security shifts from cash surplus to a deficit.
It is important to recognize when considering this full repeal of the
estate tax relief that only 2 percent of decedents have enough wealth
to be subject to the estate tax at all under current law. Further, of
the 2 percent of Americans subject to the estate tax, only 3 percent
are small business people or farmers. Additionally, only 6 in 10,000
American estates are farms or small businesses subject to estate tax.
I believe that we must provide relief to family farms and small
businesses and that is why I support the substitute offered by
Representative Rangel. This substitute would provide fiscally
responsible estate tax relief to small business and farm owners.
Specifically, it would immediately raise the special exclusion from the
estate tax from $675,000 to $4 million for a couple owning a farm or
small business and would lower the estate tax rates by 20 percent
across the board.
Our current strong economy has begun producing surplus federal
revenues, and, as you might imagine, there is no shortage of ideas for
``using'' the surplus. I am in favor of addressing negative effects of
the estate tax, as evidenced by my past votes, but I also believe we
should give priority to using these surplus funds to save Social
Security and Medicare and pay down the $5.7 trillion National Debt.
Surplus funds allow us to pay down the principal on this burdensome
debt, thus reducing the annual interest payments which amount to
approximately $250 billion annually. In fact, Federal Reserve Chairman
Alan Greenspan stated, ``Saving the surpluses--if politically
feasible--is, in my judgement, the most important fiscal measure we can
take at this time to foster continued improvements in productivity.''
A lower national debt would help reduce interest rates, resulting in
tremendous cost savings for all American families who make credit card,
car, mortgage, and loan payments. Lower interest rates will also reduce
the cost of capital for businesses, allowing for more investment and,
therefore, more job creation.
Mr. Speaker, I urge my colleagues to vote against H.R. 8. Any tax cut
must be done in a fiscally responsible manner, and not derail the
opportunity we have to reduce our large national debt and prepare for
our future obligations to our aging population.
Mr. Speaker, unfortunately due to a family obligation, I missed
today's roll call votes. On roll call vote number 252, had I been
present, I would have voted ``yea.'' On roll call vote number 253, had
I been present, I would have voted ``yea.'' On roll call vote number
254, had I been present, I would have voted ``nay.''
Ms. KILPATRICK. Today, I rise in strong and stringent opposition to
H.R. 8 which will repeal the estate tax. The majority, as it did
earlier this year, is pushing legislation that will benefit an
important, but small portion of the American population. I object to
this legislation because it is taken up at a time when the American
people have, over and over, indicated that their priorities--their
major concerns, are the ability of our nation's children to receive a
quality affordable education and the ability to receive adequate and
affordable healthcare and a reasonable minimum wage. The repeal of the
estate tax is an issue that affects only 2 percent of all estates and
will cost the treasury $50 billion when it is fully implemented.
Last year, the Republican party failed to pass its tax plan. A plan
that would decimate the budget that we have worked so diligently to
balance. The Republicans have resorted to a new approach designed to
pass their tax cut piece by piece, instead of the broad sweeping tax
cut they earlier proposed.
The Joint Committee on Taxation estimates that the repeal of the
estate tax will cost the U.S. Treasury $28.3 billion over five years,
$100 billion over 10 years and $50 billion every year after 2011. In
addition, the Children's Defense Fund points out that:
If the same funding were instead invested in children,
millions of children throughout America would get a fairer
and healthier start in life. Instead this bill ignores the
needs of 13.5 million children living in poverty to give only
the wealthiest Americans a huge tax cut. In fact, 100% of the
benefits from an estate tax cut will go to people in the top
5% income group, those earning at least $130,000 a year, with
over 90% of the estate tax going to those in the top 1%
income group, those earning at least $319,000 a year.
If we are truly concerned about American small business owners and
farmers who are most hurt by the estate tax, we should support the
Democratic substitute. The Democratic substitute will effectively
create a $4 million exclusion per family for farms and closely-held
business. The substitute would result in a total cost of $22 billion
over ten years instead of nearly $105 billion over 10 years. The
substitute also provides an immediate, 20 percent across-the-board
reduction to the estate and gift tax rates, with the maximum estate and
gift tax rates reduced from 55 percent to 44 percent.
I say to my colleagues who argue that their concern is with the
American people, where is the legislation concerning healthcare? Where
is the legislation concerning the education of our children? Where is
the legislation addressing those who earn an inadequate minimum wage?
Why are we standing here today considering a bill that only affects the
wealthiest 2 percent of the American people? These are the questions
that this body must address. If, however, we must address the question
of the estate tax, let's do so in a manner that addresses those most
hurt by the estate tax and support the Democratic substitute.
Mr. BLUMENAUER. Mr. Speaker, I was not here to vote today on
eliminating the inheritance tax. Instead, I am on the other side of the
continent, celebrating my daughter's college graduation with family and
friends. Frankly, I would have been embarrassed to be participating in
today's debate, which is nothing
[[Page H4142]]
more than a cynical political sideshow staged by the Republican
leadership in their appeal for the support of some of the most
spectacularly wealthy people in the country at the expense of people
who look to the federal government for help.
The issue before us is straightforward. I believe, as do the majority
of my colleagues, that no one should be forced to sell a family
business, farm, woodlot or closely held business, simply because a
family member or principal owner has died. Such sales are often
economically disruptive and damaging to the family involved; certainly,
they do nothing to make our communities more livable.
There is a way to solve what is a very real problem faced by some
contractors, farmers, woodlot and other business owners. We can defer
the inheritance tax permanently, so long as the business remains in the
family or closely-held partnership. I don't care how much the business
is worth--if the owners don't want to sell, they shouldn't have to. We
should also increase the exemptions in the inheritance tax, and adjust
it for inflation, just as we did with the income tax. These three steps
would solve the problem for every person who has contacted me, and
would be enacted by a large majority and signed into law by the
President.
The bill we are considering, however, is far different. Even though
it will not be enacted into law, the legislation offers clear insights
into the thinking and priorities of the leadership of the Republicans.
It would offer enormous benefits to a few hundred of the wealthiest
people in America, whose billions in unrealized capital gains will pass
to their heirs without ever having been taxed, but it ignores the
pressing needs of hundreds of millions of other Americans. What about
the 11 million American children who have no health insurance? What
about their families, working hard, but still struggling on income of
ten or fifteen thousand dollars a year? What about the elderly, who
can't afford to buy the prescription drugs that would so improve the
quality of their lives? What about the students with special
educational needs? This Congress is about to consider a budget that
shortchanges them once again.
It is scandalous that men and women who served their country may not
receive the health care they were promised. It is damaging to our
future that many of today's college graduates--the ones we will depend
on to shore up Social Security--are beginning their careers staggering
under a crushing load of student debt.
This Congress looks at all these problems and sees nothing of
interest or importance. The problems of those most well-off are far
more consuming--and far more rewarding to pretend to solve. In the end,
this bill will be vetoed and America's small businesses will be right
back where they started.
I came to Congress to help American families be safe, healthy and
economically secure. Allowing family businesses and closely held
corporations to stay in family hands would clearly help this effort. I
am not opposed to helping solve the problems of the most well-off in
society. At a minimum, however, we should pay equal attention, expend
equal effort, and invest as much in those Americans who are struggling
even in these best of times.
Mr. MOORE. Mr. Speaker, I rise in support of H.R. 8, the Death Tax
Repeal Act. I have long been a supporter of providing estate tax relief
to American families, small business owners, and farmers who have
worked their entire lives to transfer a portion of their estates upon
their death.
While H.R. 8 is the vehicle that the House leadership wishes to
pursue to achieve this goal, I believe there is a better way to provide
relief and maintain our commitments to paying down the national debt,
protecting Social Security and Medicare, and other priorities. This is
why I will also be supporting the substitute to H.R. 8.
The alternative will increase the estate tax exclusion for family-
owned farms and businesses to $4 million and simplify the rules to
allow a surviving spouse to automatically receive any credits that were
applied to the estate of the deceased. It will also increase the
unified exemption to $1.1 million and reduce estate tax rates by 20
percent. All of these changes will be made immediately, instead of
delaying relief to the small businesses and family farmers who truly
need relief for several years as H.R. 8 would do.
H.R. 8 does not repeal the estate tax for 10 years; rather, it shaves
the marginal tax rates by a total of 14.5 percent over 5 years,
delaying estate tax relief to the small businesses and farms that truly
need it. H.R. 8 uses a phase-in period to hide its real effects. While
the first 10 years cost only $104 billion, I have deep concerns about
the costs of this legislation outside the 10 year budget window. They
explode to $50 billion per year, or $500 billion in the second ten
years.
Mr. Speaker, in February 2000, I received a score from the Joint
Committee on Taxation for H.R. 3127, a bill I introduced to provide
estate tax relief by immediately increasing the exclusion to $3
million. I anticipated that this score would have less budgetary
consequences than the vetoed estate tax provisions in last year's $792
billion tax package. Joint Tax scored the estate provisions in that
bill, which tracks closely with today's bill at $65 billion, while they
scored my bill at $211 billion. This perplexed me; and when I wrote
Joint Tax back for an explanation, they replied: ``your bill provides
substantially more relief through fiscal year 2009 from the estate
gift, and generation-skipping transfer taxes than the relief contained
in Title VI of H.R. 2488.'' I have enclosed copies of these letters for
the record.
Simply, H.R. 8 would have the American people believe that they will
receive immediate and substantial estate tax relief. This bill delays a
full repeal, which will have budget implications that this country
simply cannot afford. With over $500 billion in lost revenue, this has
the potential to put this country back on the wrong fiscal track of
increased deficit spending and an exploding national debt.
Although the majority claims to support retiring the publicly held
debt, they have begun the session by scheduling several tax bills
funded by the projected budget surplus without giving any consideration
to the impact that the bills will have on our ability to retire our
$5.7 trillion national debt. These tax cuts, however, must be made in
the context of a fiscally responsible budget that eliminates the
publicly held debt, strengthens Social Security and Medicare, and
addresses our other priorities.
We can and we have cut taxes. In February, I voted for and the House
of Representatives passed a $182 billion marriage penalty relief bill.
In March, I voted for and the House passed a $122 billion small
business tax relief bill, which included estate tax relief. Later in
March, I voted for and the House passed a bill eliminating the Social
Security earnings test. And, in April I voted for and the House passed
a bill to repeal the telephone excise tax at a cost of over $51
billion. Today, the House will likely pass a $104 billion estate tax
relief bill. That brings the total tax relief approved by the House to
date up to over $450 billion or a little more than 50 percent of the
projected on budget surplus of $930 billion.
I supported all previous efforts to provide tax relief because each
has had a relatively modest cost when considered in isolation. I am
concerned, however, that the total costs of these bills will be nearly
as much as the vetoed tax bill, and could even be more expensive. This
is why I intend to support the fiscally responsible substitute which
provides immediate estate tax relief targeted to farmers and small
businesses while protecting other urgent priorities such as paying down
the debt and shoring up the long-term future of Social Security and
Medicare.
I will also support, however, final passage of H.R. 8 because it is
the only vehicle the leadership will allow to provide estate tax
relief. I will not obstruct that vehicle; however, I hope the Senate
and the conference committee consider carefully compromise language
that provides substantial and immediate relief, that is fiscally
responsible, and that the President will sign.
Mr. CRAMER. Mr. Speaker, I rise today in strong support of H.R. 8,
the Death Tax Elimination Act.
I strenuously oppose this unfair and unreasonable tax. This tax, one
imposed on earnings and assets that have already been subject to
income, social security, and other taxes at the federal and state
level, is simply unconscionable.
To begin with, the rates for this ridiculous tax, which range from 37
percent to 55 percent, are even higher than the highest income tax rate
of 39.6 percent. This tax is making an already difficult situation
unnecessarily worse for our small, family-owned businesses and family
farms. Even the most modest farm or business can easily exceed the
current death tax exemption because of their investment in capital
assets like land and equipment.
Mr. Speaker, it is outrageous that today it makes more sense to sell
a family-owned business before death rather than pass the business to
one's heirs. These businesses are the backbone of America's economy--
creating more jobs than any other facet of our economy. We must work to
nurture and protect these businesses, not destroy them through
unnecessary and unfair taxes.
Mr. Speaker, if we can't eliminate this tax--which only accounts for
less than 1% of our overall revenue--in these times of tremendous
budget surpluses, when can we?
This tax cost jobs, it prevents families from passing on their
businesses or farms to their children, and ultimately it does nothing
to our bottom line.
In short, Mr. Speaker, to put it simply, the federal government just
should not be in the business of taking 55 percent of a family's
business and destroying their livelihood. This tax should be
eliminated, and it should be eliminated today, not next week or next
month or next year.
[[Page H4143]]
I hope my colleagues will join me in voting for the elimination of
this onerous and damaging tax.
I urge the adoption of H.R. 8.
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his
support for H.R. 8, the ``Estate Tax Elimination Act of 2000.'' This
Member's vote for this legislation today is based on his desire to move
the inheritance tax reform process forward by dramatically increasing
the Federal inheritance tax exemption level. However, this Member does
not support the complete repeal of the Federal inheritance tax.
This Member is a long-term advocate of inheritance tax reduction,
especially in regard to protecting small businesses and family farms
and ranches. This Member believes that inheritance taxes unfortunately
do adversely and inappropriately affect Nebraskan small business and
family farms and ranches when they attempt to pass this estate from one
generation to the next.
Accordingly, to demonstrate this Member's very real support for
inheritance tax reform, this Member supported the Taxpayer Relief Act
in 1997 which passed on July 31, 1997. This Act phased-in an increase
in the unified credit exemption from the current level of $675,000 to
$1.0 million in 2006. Also, it provided an immediate exclusion of $1.3
million (not in addition to the broader exclusion) for a limited
variety of eligible closely-held family farms and businesses.
At the current time, this Member does not support the complete
elimination of inheritance taxes. It would be a great political error
and controversy to eliminate the inheritance tax on people like Steve
Forbes or the billionaires or mega-millionaires. Also, the very
negative impact on the largest of the charitable contributions and the
establishment of charitable foundations cannot be underestimated. The
benefit of these foundations to American society are invaluable. Our
universities and colleges, too, would see a very marked reduction in
the gifts they receive if the inheritance tax on the wealthiest
Americans was totally eliminated. Despite the legal talents the super-
rich can afford, such an inheritance tax change would have major
consequences. The total elimination of the inheritance tax is a bad
idea.
This Member's vote for this legislation only should be regarded as a
demonstration of his desire to move the inheritance tax reform process
forward by increasing dramatically the exemption level to the Federal
inheritance tax. In addition, there is overwhelming support among his
constituents for inheritance tax reform.
Specifically, this Member does not support repealing the inheritance
tax, with the final step completed in this legislation to zero percent
inheritance tax from the year 2009 to the year 2010 as proposed.
Instead, this Member prefers the Ewing approach which he
enthusiastically support. This Member is an original cosponsor of H.R.
4112 which was introduced by Representative Tom Ewing on March 29,
2000. This measure (H.R. 4112) would immediately increase the Federal
inheritance tax exemption from a rate of $675,000 to $5 million and
would then increase this exemption annually over the next three years
until it reaches a total of $10 million in 2003. After reaching the $10
million level in 2003, the exemption would be indexed annually
thereafter to account for inflation. Essential inheritance tax relief
is provided by H.R. 4112 for even wealthy business and farm families.
This Member is even willing to raise the exemption level beyond $10
million to, for example, $15 million.
By the way, most Nebraskans pay more state inheritance taxes than
Federal inheritance or estate taxes so Nebraskans should also consider
pushing for reductions or reforms in their state taxes.
Mr. Speaker, this legislation, H.R. 8, if passed by the House, goes
to an uncertain future in the Senate. In addition, if any legislation
is reported from the Congress this year which totally eliminates the
Federal inheritance tax, it is assured of a Presidential veto. Thus,
this vote for H.R. 8 should be regarded as only demonstrating my firm
conviction that we need to dramatically increase the Federal
inheritance tax exemption level.
Finally, Mr. Speaker, if a conference report comes back to the House
that totally eliminates the Federal inheritance tax, this Member will
vote against it.
Mr. ENGEL. Mr. Speaker, in demonstration of my support for family
owned businesses and farms, and because estate taxes are, in general,
too high and burdensome, I cosponsored H.R. 8. I am glad that my action
helped to shed light upon this issue.
However, H.R. 8 was never a perfect bill. While rightfully focusing
on the need to help reform the estate tax, the bill goes too far. I am
concerned that although the bill does help small businesses and family
farms, the majority of people who benefit if H.R. 8 passes are not
average Americans, but the most wealthy. Furthermore, the bill would
result in a substantial revenue loss over the next 10 years.
This week, I have reviewed the amendment to H.R. 8 which will be
offered by our colleagues, Representatives Rangel, Cardin, and
Stenholm. This Democratic alternative specifically addresses the issue
of providing relief to our farmers and families, which is the most
important aspect of estate tax reform. I will, therefore, be very
pleased to support the Democratic substitute as it addresses the very
reason I cosponsored H.R. 8. It is my hope that this amendment will
pass so that I can vote for H.R. 8, as amended. However, given that the
Democratic substitute is markedly superior to the underlying bill, I
will vote against H.R. 8 if the Democratic substitute fails.
Mr. McDERMOTT. Mr. Speaker, by bringing their estate tax elimination
proposal to the floor, the Republicans are clearly pandering to the
richest Americans. Most Americans are not affected by the estate tax.
98 percent of all estates are exempt from the tax. Of the two percent
that are liable, only 3 percent of those are small businesses and
farms.
The estate tax repeal will not become law; this vote is purely
political. If the Republicans genuinely wanted to help the 6 in 10,000
American small businesses and farms subject to the estate tax, they
would have worked with Democrats to craft a bipartisan compromise.
Over the past two decades, income and wealth disparities have
increased. The Republican proposal will exaggerate this by making the
rich richer and the poor poorer. Repeal of the estate tax for the
Forbes 400 richest Americans would amount to $200-300 billion. Enough
to pay for a Medicare prescription drug benefit for 10 years!
The rhetoric the Republicans have invoked during the estate tax
debate is misleading. Calling the estate tax the ``death tax'' infers
that all Americans will lose half of their estate and needlessly scares
people.
Mr. WELDON of Florida. Mr. Speaker, I rise today in strong support of
H.R. 8, the Death Tax Elimination Act, of which I am a cosponsor. We in
the House of Representatives are poised to continue our commitment to
tax fairness for all hard-working Americans by voting to repeal the
Death Tax. The Death Tax ranges from 37 to 55 percent and can even get
as high as 60 percent in some cases. The Death Tax Elimination Act
(H.R. 8) would phase out the tax over the next ten years on the death
of an American.
Since 1994, Republicans have been committed to balancing the budget,
protecting Social Security and Medicare, and providing tax fairness to
all hard-working Americans and their families. To date we have passed
the Repeal of the Marriage Penalty, Small Business tax fairness, the
Repeal of the Seniors' Work Tax, ended the 100 year ``tax on talking,''
and today we can get rid of the Death Tax.
Americans pay taxes their whole lives, then at their death, Uncle Sam
wants to get some more--sometimes taking over half of the poor soul's
legacy. I have talked to farmers and small business owners in my
district who are extremely worried at what the Death Taxes will mean to
their children and grandchildren. These hard-working Americans have
worked a lifetime to build a farm or business only to have it stripped
and taken from their children by the Death Tax.
The death tax is one of the most immoral taxes on the books, because
it taxes farmers and small business owners twice. First these hard-
working Americans pay all of their taxes throughout the years, then the
federal government taxes the value of their property again at the time
of death.
No American should be forced to pay up to 55 or 60 percent of their
savings when they die. I'm proud to be part of the effort to repeal
this tax. Let's bury the death tax once and for all.
Let's pass this repeal and end the tax on death.
Mr. SCHAFFER. Mr. Speaker, I rise today in support of H.R. 8, the
Death Tax Elimination Act. As a cosponsor of this legislation, I am
convinced this tax is completely unnecessary and in fact does more harm
than good. The death tax penalizes business and job growth and impacts
all individuals, not just the wealthy. It creates disincentive for
expansion, long-term investment, and many times forces families to make
difficult decisions about the future of their business.
The death tax discourages the entrepreneurial spirit held dear by so
many Americans. Our country was founded on principles that encourage
citizens to become as successful as their talents allow. The Founding
Fathers gave us the liberty to acquire and dispose of personal
property. Unfortunately, some were mistakenly led to believe that
equality of economic opportunity and the joys of owning property could
be imparted to all by redistributing wealth.
Today the death tax is actually burdening those it was once intended
to help. Small business owners, farmers and self-employed individuals
often fall victim to the tax. They sacrificed daily to build their
business by reinvesting their profits only to realize that their
[[Page H4144]]
hard work and frugality will be rewarded by an excessive tax of up to
55 percent.
Many small business owners are forced to explore ways to shelter
their assets from taxation, but the death tax is complicated. The tax
actually encourages people to find creative ways to avoid it. It takes
well-paid lawyers and accountants to find the best ways to legally
avoid the high death tax liabilities ranging from 37 to 55 percent.
The amount of money spent complying with, or trying to circumvent,
the death tax is astronomical. Most of these solutions are costly, time
consuming and inefficient. Gifts of stock, ownership restructuring,
life insurance purchases and sales agreements are some of the tactics
used to avoid the death tax. For most family farms, ranches and
businesses, it's just too expensive.
Nearly 98 percent of the two million farms in this country are owned
by families. Those who cannot pay the costly tax-planning fees are
forced to pay higher estate taxes. It is a tragedy that a family
grieving over the death of a loved one should have to worry about
losing the family business or farm to the Internal Revenue Service.
Because the death tax requires a family to pay the federal government
in cash within 9 months of the death of the decedent, it places a
unique burden on a family farm or ranch like those in Colorado.
Due to the capital-intensive nature of ranching, the income generated
by a typical family ranch is often minimal and is generally reinvested
in the operation. The result is that the sale of land or livestock is
often the primary, and in some cases the only, source of funds
available to meet this tax obligation when a family member passes away.
Many of the farms and ranches near cities in Colorado are being sold
and are being replaced by housing projects, malls and roads.
Mr. Speaker, the death tax is also an example of double taxation.
Small business owners, family farmers and ranchers pay income taxes
throughout their lifetime. At the time of death, their surviving
beneficiaries are forced to pay another tax on the value of the
property.
The people of Colorado and across America are tired of losing their
hard-earned money to the federal government. Small businesses are
sometimes forced to sell income-producing assets or lay off workers.
Often a small business owner makes the tough choice to sell the
business in order to pay a significantly lower capital gains rate of 20
percent instead of the marginal death tax rate that could reach 55
percent.
Unfortunately, our Democrat friends who oppose this bill are dragging
out the same old argument that the death tax prevents only the rich
from passing on millions of dollars to their families. The fact is the
IRS reports that 86 percent of all taxable estates have assets worth
less than $2.5 million. Four out of five estates are valued at less
than $1 million.
At the same time, the death tax accounts for a mere 1.4 percent of
all federal revenues. This meager amount is not worth the money
Americans spend to comply with the tax, or the number of jobs lost
because family businesses must be sold. In fact, as the IRS collects up
to 55 percent of the value of the estate upon death, it spends
approximately 65 percent of that revenue on administration and
collection costs.
Mr. Speaker, nearly 70 percent of small businesses do not survive the
second generation and 87 percent do not make it to the third
generation. Today, Members of this House should ask themselves if
families should continue to work hard only to lose their life's wealth
to the government instead of passing it on to their families.
Mr. Speaker, the case is clear. Now is the time to eliminate the
death tax. Let's give the American people to chance to develop their
ideas and dream about the legacies they'll leave behind.
Ms. McCARTHY of Missouri. Mr. Speaker, I rise today to express my
strong support for targeted estate tax relief. Small businesses and
farm owners should not be penalized for their success nor should they
have to worry about their ability to pass the family business on to
future generations. The Democratic Substitute offered by the gentleman
from New York lowers rates and broadens the base and is a rational
alternative for estate tax reform.
Many middle class Americans believe they do not receive value for
their taxes. An important component of any tax reform debate should
focus on renewing taxpayer's confidence that they are not only being
taxed fairly, but that their tax dollars are being spent wisely. It
concerns me that we are considering repeal of the estate tax today
without a broader discussion of reform of our tax policy. We don't make
decisions in a vacuum and the decisions we make today will have an
impact on future revenues, individual tax burdens, and spending on
priority initiatives such as prescription drug reform, school
construction and paying down the debt.
The estate tax was originally enacted into law as a way to reduce
wealth inequality by targeting the accumulation of wealth by sons and
daughters of the richest in our society. The estate tax serves an
important purpose by continuing to equalize wealth in our society.
Historically, the richest in our society are the ones who pay the
majority of the estate tax.
Currently, only two percent of people who die have enough wealth to
be subject to the estate tax. Of the two percent who pay the estate
tax, only three percent are small business owners or farmers. According
to the Joint Committee on Taxation, the largest estates pay most of the
estate tax--5.4% of taxable estates paid 49% of total estate taxes in
1997. Further a United States Treasury Department analysis finds that
99% of all estate taxes are paid on the estates of people who are in
the highest 20% of the income distribution at the time of their death
and 91% of all estates taxes are paid by decedents by decedents with
annual incomes exceeding $190,000 at the time of death.
The estate tax is a progressive tax that serves the purpose intended
by Republic Presidents Teddy Roosevelt and William Howard Taft who put
this tax in place. Experts point out that the majority of assets taxed
under the estate tax are unrealized gains and tax-exempt bonds which
have never been taxed.
Some small businesses and farmers are hit hard by this tax and it is
a high priority for me to provide relief to these individuals. In my
congressional district is Brown Industries a family owned small
business which specializes in precision machined parts. I have toured
their facility and met with members of the Kansas City Area Chapter of
the National Tooling and Machining Association (NTMA). All of the firms
represented focused their number one concern on estate tax reform.
These firms face liquidating entire section of their plants to pay
current estate tax so that the business can be inherited. Estate tax
reform should consider estate tax and economic opportunity and address
the concerns of small businesses like Brown Industries. The Democratic
alternative does this. They will be negatively impacted by H.R. 8. I
support estate tax relief which would exempt 99% of family farm estates
taxes. The measure I vote for today increased the family exclusion for
farms and closely held businesses to $4 million by increasing the limit
on the small businesses exclusion from $1.3 million to $2 million per
spouse. This would have provided real relief immediately. Without
adoption of the substitute H.R. 8 would not provide relief to a single
farm or small business from the estate tax until 2010. This relief is
much needed now, not in ten years.
The measure I voted in favor of today would have immediately
increased the exemption equivalent of the unified credit against estate
and gift taxes to $1.1 million. It also would have provided a twenty
percent across-the-board reduction to the estate and gift tax rates.
Finally, I voted for an estate tax relief proposal which was largely
offset and would cost approximately $20 billion over ten years to
maintain fiscal responsibility. H.R. 8 will cost the treasury $105
billion over ten years. Beginning in 2010, it will cost $50 billion per
year. While I am pleased that fiscal discipline of the past eight years
has brought us to a time where we are enjoying budget surpluses, the
surpluses in future years have not materialized and are only
projections. I am optimistic the surpluses will be a reality and
believe that we must commit them wisely. At this time, I am unconvinced
that completely repealing the estate tax without further modifying our
tax policy to ensure that wealthiest among us are paying their fair
share is a wise decision. Projected surpluses still require us to make
difficult decisions about priorities, and I believe that the measure I
voted for today provides fiscally responsible relief.
I strongly support targeted estate tax relief for individuals, small
businesses and farm owners. I voted in favor of a fiscally responsible
proposal today which would have provided immediate relief to many of
the 989 individuals in Missouri who pay estate tax. As this bill moves
forward in the legislative process I encourage both parties will work
together to find a compromise which will provide the needed relief and
which will be signed into law by the President.
Mr. UDALL of Colorado. Mr. Speaker, I will vote for this bill, but
only very reluctantly.
My reluctance does not mean I don't support estate-tax relief for
family-owned ranches and farms or other small businesses. In fact, I
definitely think we should act to make it easier for their owners to
pass them on to future generations.
This is important for the whole country, of course, but it is
particularly important for Coloradans who want to help keep ranch lands
in open, undeveloped condition by reducing the pressure to sell them to
pay estate taxes.
But we do not need to do all that this Republican bill would do in
order to make sure the estate tax is no longer too heavy a burden on
the small business and farm owners.
[[Page H4145]]
The Democratic alternative--the substitute for which I voted--would
have provided real, effective relief without the excesses of the
Republican bill.
That alternative would have raised the estate tax's special exclusion
to $4 million for a couple owning a farm or small business. So, under
that alternative, a married couple owning a family farm or ranch or a
small business worth up to $4 million could pass it on intact with no
estate tax whatsoever.
Also, the Democratic alternative actually would have provided more
immediate relief to small business and farm owners.
Unlike the Republican bill--which is phased in over ten years--the
Democratic alternative would have taken effect immediately. That means
a couple passing on their farm or small business in the near future
would avoid more tax under the Democratic plan than under the
Republican bill. They would not have to hope to live long enough to see
the benefits.
In addition, by increasing the general exclusion (now at $675,000) to
$1.1 million next year, the Democratic alternative would allow for any
person to pass on ``millionaire'' status to their children without a
penny of estate tax burden. And the Democratic alternative also would
lower estate tax rates by 20% across the board.
So, the Democratic alternative--which I voted for and which deserved
adoption--would provide important relief from the estate tax and would
have done so in a real, effective, and prompt way.
Furthermore, the Democratic alternative would have provided this
relief in a fiscally responsible way that would not jeopardize our
ability to do what is needed to maintain and strengthen Social Security
and Medicare, provide a prescription drug benefit for seniors and pay
down the public debt.
By contrast, it is precisely the fiscal overkill of the Republican
bill that makes me most reluctant to vote for it.
Once fully phased in, the Republican bill would forgo nearly $50
billion a year in revenue with no guarantee that this revenue loss will
not harm Social Security and Medicare in future years.
The bill's sponsors say it will cost $28.2 billion over 5 years and
$104.5 billion over 10 years. But that is far from the whole story.
Because of the way the bill is phased in, its true cost is cleverly
hidden and does not show up until after the 10-year budget window.
That means the full effects of the Republican bill will come just at
the time when we will have to face budget pressures because my own
``baby boom'' generation is starting to retire. And if we feel we need
to ``phase in'' H.R. 8 because we cannot afford the full repeal now,
how are we ever going to afford it 10 years from now?
We do not need to engage in this fiscal overkill.
According to the Treasury Department, under current law only 2% of
all decedents have enough wealth to be subject to the estate tax at
all.
To be more specific, the Treasury Department tells me that in 1997
estate-tax returns were filed for only 297 Coloradans.
Furthermore, according to the Treasury Department, of those estates
that are affected by the estate tax, only 3%--that is only 6 in 10,000
American estates--were comprised primarily of family-owned small
businesses, ranches, or farms.
Looking just at our state, that means that in 1997 fewer than a dozen
estate-tax returns were comprised primarily of small businesses,
ranches, or farms.
Of course, those numbers only relate to the cases in which an estate
tax was actually paid. Clearly, in many other cases families have taken
actions to forestall the estate tax. I understand that, and do think
that in appropriate cases we should lessen the pressure that prompted
some of those actions.
As I said, the Democratic alternative would have provided real,
effective, and immediate estate-tax relief to the owners of small
businesses, including farms and ranches, and would have done so in a
fiscally responsible way. That is why I voted for it.
In contrast, the biggest beneficiaries of the Republican legislation
are not those middle-class families who own small ranches or farms or
other small businesses, but instead are very wealthy families with very
large assets.
Over the past two decades, income and wealth disparities have
increased. The Republican bill, while it does have some positive
aspects, would increase those wealth disparities. I find this
troubling, and it adds to my reluctance to support the bill.
However, I will vote for the bill because the Republican leadership
has made it clear that it is this bill or no estate-tax relief bill, at
least for now, here in the House.
That being the case, I have decided that the Republican bill--
although very flawed and excessive--is just acceptable enough for me to
vote for today.
I do so in the hope and expectation that the bill's faults can be
corrected as it proceeds through the legislative process and that
ultimately it can be refined into a bill that deserves to be enacted
into law.
If that does not occur--if that hope and expectation prove
unfounded--I will not vote for a bill that fails to meet that standard.
Mr. BENTSEN. Mr. Speaker, I rise in opposition to H.R. 8, the ``Death
Tax Elimination Act,'' a fiscally-imprudent measure that the Republican
Majority has brought to the floor, knowing that it provides tax relief
to only two percent of all estates and benefits only the wealthiest in
our society. I am supportive of federal estate tax relief, not a
repeal, particularly for family farms and closely-held small businesses
and strongly support of the Rangel Substitute Amendment, a fiscally
responsible alternative that the President will sign.
Under H.R. 8, the federal estate tax would be reduced gradually over
the next decade and would be fully repealed in 2010. The Joint
Committee on Taxation estimates that it will cost $105 billion to
repeal the estate tax in the first ten years. However, the
Administration estimates that the federal revenue loss from H.R. 8
would be approximately $50 billion annually after 2010, once the estate
and gift tax was fully repealed. Thus, the cost of H.R. 8 in the second
decade of phase-in would be nearly six times the cost for 2001-2010.
As a member of the Budget Committee, I continue to advocate that
Congress preserve the budget surplus and use it to pay off the national
debt while strengthening Social Security. The $3.7 trillion dollar
public debt is a tremendous burden on the economy. H.R. 8 jeopardizes
our ability to protect Social Security and Medicare and pay down the
national debt by creating a revenue loss, when executed, in excess of
half a trillion dollars over ten years.
In the second decade of the century, with H.R. 8 costing $50 billion
annually, the ``Baby Boom'' generation will begin retiring in large
numbers, logically driving up the costs of programs such as Social
Security, Medicaid and Medicare. At the same time, the Congressional
Budget Office (CBO) projects that total Federal budgetary surpluses
will begin to decline. How will we pay for the programs? Will we cut
Social Security, Medicare and Medicaid benefits?
H.R. 8 would only help the less than two percent of all estates that
are currently subject to any federal estate tax. To be subject to the
federal estate tax, the size of one's estate must exceed $675,000 in
2000. By 2006, the estate tax exemption will rise to $1 million.
Furthermore, current law provides for an even higher exemption of $1.3
million per person for closely-held farms and non-public businesses.
But H.R. 8, under the guise of helping family farms and ``mom & pop''
small business would repeal the estate tax on all estates including the
wealthiest. Under this bill, Bill Gates would be able to transfer
$80,000,000,000 tax free to his heirs, hardly the estate of a small
businessman.
The Rangel Substitute is an appropriate affordable alternative which
provides relief to real family-owned businesses and farms. Rather than
repeal the tax and bust the budget, it provides an across-the-board 20
percent reduction to the top estate and marginal gift rates, including
a reduction in the top marginal rate from 55% to 44%. It would
immediately increase the exemption equivalent of the unified credit
against estate and gift taxes to $1,100,000. It also would provide for
targeted tax relief for farm and small business estates and raise the
special exclusion to $2 million per person, $4 million for a married
couple. Moreover, the Rangel Alternative is a fiscally responsible
measure, costing approximately $20 billion over 10 years with no
exploding outyear costs. Clearly, Mr. Rangel has proposed a superior
measure that truly helps those that the proponents of H.R. 8 purport to
be helping.
Finally, I would also like to address the myth perpetuated by my
colleagues on the other side of the aisle that H.R. 8 enhances
protections for small businesses and farms. H.R. 8 does not provide any
additional exemption until 2010, while the Rangel Alternative would
provide an immediate $4 million per family exclusion for family farms
and closely-held small businesses and would exempt 99% of family farms
form estate taxes. In the past, I have supported legislation that has
provided relief to family farms. In 1997, I supported the Taxpayer
Relief Act (P.L. 105-34) that raised the effective deduction for
qualified family-owned business interests to $1.3 million per
individual, which exempts almost all family farms and small businesses
from the estate tax. Moreover, the few businesses and farms that are
subject to the estate tax can make payments in installments over
fourteen years at below-market interest rates. The Rangel Substitute
would build on these protections by providing further immediate relief.
There is a need for estate and gift tax reform but outright repeal
through passage of H.R. 8 is clearly not the way. If proponents are in
favor of real reform to help owners of real small businesses and farms
and not the wealthiest among us, I urge them to join with me in
supporting the Rangel Substitute.
[[Page H4146]]
Mrs. BIGGERT. Mr. Speaker, I rise today in strong support of the
Death Tax Elimination Act. This unfair tax has long outlived its
usefulness.
I come to this debate with something of a unique perspective on this
issue. For more than twenty years, I practiced estate law. I have
actually sat down and helped people navigate this extremely complex
tax. I was not helping Bill Gates or Ross Perot--I was helping the sons
and daughters of small business owners try to keep their parent's
dreams alive.
Unfortunately, because they have to pay a tax of 37 to 55 percent on
their estate, it is often impossible for them to continue. It is simply
heartbreaking to see children who want to keep their parent's business
alive have to sell it just to pay the taxes.
We are here in Congress to make things better for the American
people. When more than 70 percent of small businesses do not make it to
the second generation, something is wrong and must be made better.
The Death Tax Elimination Act will make things better.
I urge all my colleagues to support the Death Tax Elimination Act.
The time is now to once and for all put an end to the death tax.
Mr. RYAN of Kansas. Mr. Speaker, I rise today to oppose the
proposition that an American who works hard, builds a business and
saves for his family should have to turn over 55% of what he owns to
the tax collectors in Washington when he dies.
The Death Tax reduces economic growth and increases the cost of
capital. It causes individuals to shift much of their wealth to
immediate consumption rather than long-term, productive investments. If
these investments were made, it would create long-term economic growth
by lowering interest rates and creating more jobs.
It shouldn't surprise us, however, to hear those who favor the Death
tax argue that repealing it would help only the rich. Next time I go
back to my district and hear from the farmers and small business men
who ask me why their families will have to sell their business to pay
the Death Tax, I'll tell them that some influential members of the
other party in Washington said they were too rich to get relief.
To add insult to injury, I'll remind them that the federal government
raises just 1% of its annual revenue from the Death Tax.
I'll even tell them that those who can afford to hire lawyers and
accountants to tend to their finances have already figured out ways to
avoid paying the tax.
Mr. Speaker, I also want to speak about another unjust provision of
our tax code that this legislation will repeal. The Generation Skipping
Tax effectively prohibits the transfer of your property to your
grandchildren or someone 37\1/2\ years younger than you by taxing that
transfer at a rate of 55%.
In my district, the long-time business owner of Key Industries,
Kenneth Pollock, regularly paid bonuses to his employees based on
loyalty and length of service to the company. Whether you worked in the
executive office or on the assembly line, everyone was treated the
same.
As Mr. Pollock prepared for his death, he determined that he wanted
to leave his estate in trust for the benefit of his current and former
employees. Each current or former employee was to continue to receive
an annual distribution from the trust in an amount similar to their
annual bonus based on years of service to the company.
Unfortunately, Mr. Pollock did not properly prepare the trust. All
employees more than 37\1/2\ years younger than Mr. Pollock are now
subject to the 55% Generation Skipping Tax on each distribution from
the trust. Many of these workers earn less than $10 per hour. It is bad
public policy to tax this much-needed annual bonus at 55%. It is bad
public policy to discourage generosity.
To make things worse, the company was forced recently to make the
difficult business decision to close two plants. Many displaced workers
will receive one-time lump sum payments from the trust of $10,000 or
more. The employees will lose more than 1/2 of this money at a time
when they need it most.
Unfortunately, the repeal of the Generation Skipping Tax will not
take place for nine years. That is why I have authored legislation to
treat the annual distributions from this trust just like any other gift
by exempting the first $10,000 from the tax annually. Mr. Speaker, I
hope that you and Chairman Archer will work with me to pass this much
needed provision.
Today, however, we have the opportunity to encourage economic growth
and remove this tax burden that falls heaviest on the family businesses
and family farms across Kansas and the rest of the country.
Mr. Speaker, I urge my colleagues to join me and vote to repeal the
Death Tax.
Mr. ETHERIDGE. Mr. Speaker, I rise in reluctant support of H.R. 8,
the so-called Death Tax Act. While I would prefer a more targeted
approach to eliminating this tax, I remain hopeful that passing H.R. 8
could be the first step in the process of finding a compromise granting
the vast majority of Americans estate tax relief without jeopardizing
the fiscal health of our nation.
Let there be no mistake, I have supported relief from the death tax
for our family farmers and small business owners since I came to this
body in 1977. The first bill I introduced as a Member of Congress was
H.R. 1845, the Family Farm and Small Business Estate Tax Relief Act of
1997. This legislation would have raised the inheritance tax exemption
for small business people and family farmers from $600,000 to $1.5
million and indexed it to inflation for the first time. The Taxpayer
Relief Act of 1997 later raised the exemption to $1.3 million. This was
not as much estate tax relief as I had hoped for, so I continued
working.
On March 27 of this year, I introduced a proposal that would
significantly reduce the estate tax burden faced by those who inherit
family owned farms and small businesses. I believe that the current
estate tax exemption should be raised from the current level of $1.3
million to $4 million over the next five years and indexed to inflation
thereafter. Reducing estate taxes is vital to ensuring that family
farmers and small business owners can pass their hard-earned assets to
their loved ones. My bill accomplishes this important goal in a
responsible manner that is consistent with our values.
The Democratic Substitute to H.R. 8, offered by my good friends from
New York and Texas, Mr. Rangel and Mr. Stenholm, also would provide for
a $4 million estate tax exemption to family farmers and small
businesses, as my bill would. It cuts estate taxes across the board by
20 percent and only costs $22 billion over 10 years. I am proud to
support the Rangel-Stenholm plan because it is fiscally responsible and
represents the kind of compromise that can not only obtain wide
bipartisan support, but also be signed by the President.
Unfortunately, the Republican bill, H.R. 8, once fully implemented,
would cost the U.S. Treasury $100 billion over 10 years and then an
estimated $50 billion a year afterwards. This means less money for
school construction, less money for Medicare, and less money to protect
Social Security for the rest of this century.
There are other flaws to H.R. 8. While the Democratic alternative
provides estate tax relief to family farmers and small businesses
immediately, H.R. 8 forces farmers and businesses to wait 10 years
before obtaining the same level of benefits. The President has
indicated loud and clear that he intends to veto this bill if it
reaches his desk. The Republicans should work in a bipartisan manner to
find a compromise that can become law and provide immediate tax relief.
I reluctantly vote in favor of H.R. 8, I vote for H.R. 8 today to
move the legislative process forward, hopefully toward a bipartisan
conclusion that will accomplish real relief from the estate tax for
North Carolina's family farmers and small businesses.
I vote in favor of H.R. 8 now, but reserve the right to vote against
this or similar bills in the future if my concerns about the problems
of this plan are not addressed. Additionally, I reserve the right to
vote to sustain the expected presidential veto of H.R. 8 unless needed
changes are made.
Mrs. FOWLER. Mr. Speaker, I rise today to express my strong support
for the Death Tax Elimination Act of 2000. During my tenure in Congress
I have supported measures that would provide relief from unfair taxes
to all Americans, and I have long believed that eliminating the estate
tax is an important step in this process. It is past time to remove
this onerous, unfair tax that punishes life-long habits of saving and
discourages entrepreneurship.
The real burden of this tax falls on family-owned businesses and the
people who work for them who lose their jobs when a business is forced
to sell in order to pay these taxes. The death tax is a major reason
that 70% of small businesses do not survive to the second generation
and 87% do not survive to the third. A repeal of the estate tax will
mean more jobs, economic growth and preservation of the American Dream.
Uncle Sam should not be sitting outside a funeral home waiting to
take away the family business. It is time we allow families to pass on
the family business to new generations without being hit by an
arbitrary tax of 37 to 55 percent of the value of their business. I
urge my colleagues to vote to remove this outrageous tax on hardworking
American families.
Mr. THORNBERRY. Mr. Speaker, I rise in support of H.R. 8, although I
would prefer to abolish the death tax immediately and completely. But,
the unusual budgetary scoring rules which we must follow do not allow
us to take into account real world consequences of changes in tax
policy, and so we must phase it out.
While there is a lot of ``sound and fury'' in this debate, the
essential point is this: It is
[[Page H4147]]
wrong to tax death. It doesn't matter if someone has saved $5 or $5
million; it is wrong to tax death.
People in my district and all around the country have worked hard all
their lives, paid taxes on what they have earned, saved, and want to
leave something so their children can have a better life. It is wrong
to punish them for doing so.
It also makes sense to get rid of this tax. A report by our Joint
Economic Committee in December 1998 provides Members with a
comprehensive look at the many studies that have been made on the
effects of this tax. The JEC report found that:
The death tax reduced capital stocks in the U.S. by 3.2%, limiting
growth, job creation, and higher standards of living for our people.
The death tax makes small businesses, particularly minority and
female-owned small businesses, less likely to invest, expand, and hire
new workers. Indeed, they are forced to spend thousands of dollars on
lawyers, accountants, life insurance, and other tax avoidance measures.
The death tax is ineffective at redistributing wealth, for those who
believe that should be a desirable goal of the federal government.
The death tax raises little, if any, net revenue for the federal
government when the enormous costs of compliance and economic
consequences of it are taken into account.
Mr. Speaker, we should not punish growth, savings, and job creation.
We should not punish people who try to leave a better life for their
children. We should abolish the death tax once and for all.
Mr. PASTOR. Mr. Speaker, during the recent consideration of H.R. 8,
legislation which would repeal the estate tax, I supported an
alternative which was drafted to give immediate protection to the
American farmer and the small businessman whose heirs are in danger of
losing their family's hard-earned, life-long business to the Federal
government.
I have always supported the elimination of the estate tax. And even
though I am a cosponsor of H.R. 8, I believe the Democratic alternative
is better suited, at this time, for accomplishing what we need in
eliminating this unfair tax. The Democratic alternative immediately
provides a $4 million per family exclusion for farms and small
businesses and it lowers the tax rate. H.R. 8 takes ten years before it
is fully phased-into place.
In short, the Democratic alternative helps the right people right
now. It does more and does it quicker than the version of H.R. 8 which
I cosponsored back in July of 1999. At that time, there was no better
alternative and it was assumed that a comprehensive tax package would
be instituted which would provide across-the-board benefits for hard-
working middle-class citizens as well as the wealthy. Standing alone,
H.R. 8 does nothing for middle-income families. And by not enacting a
full package of tax relief for all Americans, the lost revenues
increase the burden on the same middle-income workers who must make up
the shortfall in preserving Social Security and Medicare, providing a
prescription drug benefit for our seniors, improving our educational
system, and paying down the debt.
Like the rest of America, I am pleased that we are enjoying a period
of prosperity with a strong economy. However, we have no guarantee that
this respite will continue. In light of this uncertainty, it is
patently unfair to grant a massive tax relief provision that benefits
only 2% of the nation's richest persons while creating a drain on
revenues which would ultimately burden two-income families who are
struggling today to make ends meet.
Mrs. McCARTHY of New York. Mr. Speaker, I rise today as a proud
cosponsor of H.R. 8, The Estate Tax Elimination Act, which provides
estate tax relief for family-owned small businesses.
The estate or ``death'' tax has deviated from its original intent and
purpose. From a practical sense, it was established to provide revenue
on a short-term basis to finance military action.
In theory, however, it was also viewed as a way to protect society
against growing concentrations of wealth in the hands of a very few.
Supposedly, this tax would encourage market growth which was hindered
by the inheritance of estates.
Well, the market has grown. Family-owned small businesses have become
the backbone of our economy and continue to provide invaluable
services.
Recognizing their importance, programs were created to promote their
existence and expansion in the form of loans and other assistance
programs. Unfortunately, their lifespan is hindered by an unfair tax
levied when ownership is transferred at the time of death.
Less than 30 percent of all family-owned businesses survive through
the second generation. This is unacceptable.
The district I represent on Long Island, is dependent on the success
of family-owned small businesses. A lot of hard work and determination
is involved to secure their prosperity.
More often than not the odds are usually stacked against them in the
form of a complex tax code or competition by larger companies. The
estate tax, however, is another hurdle small businesses must overcome
that is more harmful than beneficial.
I urge my colleagues to support this important measure.
Mr. CHAMBLISS. Mr. Speaker, the folks that I represent in Georgia's
8th, Congressional District are hard-working. The majority of these
people own small family businesses and family farms. They get up each
day, go to their jobs, work hard for their families, and pay their
taxes like responsible Americans.
The federal government asks them to do all of this, but at the end of
the line, after a lifetime of hard work and paying taxes, Uncle Sam
reaches in and takes over half of their life's accumulation. This is
simply wrong. Mr. Speaker, the death tax is immoral, un-American, and
this House must bury it.
The death tax is an unfair burden that taxes farmers and small
business owners twice. The farmers in Georgia's 8th District work
tirelessly to feed and clothe America. They do this while battling
severe weather, droughts, floods, and low prices. Times are tough in
rural America right now, the burdens are high, and the death tax is
just a slap in the face to our farmers, who produce the safest, highest
quality food and fiber in the world.
The death tax affects one-third of small business owners, who are
forced to sell outright or liquidate a part of their firms to pay
estate taxes. When mom-and pop shops must close because of an outdated,
unfair tax code, this Congress must take the lead and make a change.
The death tax is contrary to the freedom and free-market principles
on which this nation was founded. Do we support the IRS or do we
support the American family? We must help Georgia families continue
their livelihood and pass their legacy and success on to their children
and grandchildren, not burden them with taxes that kill a lifetime of
hard-work. Let's bury the death tax here, today. I urge my colleagues
to vote to end the estate tax.
Mr. PORTMAN. Mr. Speaker, I rise to express my support for H.R. 8,
the Death Tax Elimination Act. I commend the sponsor of the bill, my
Ways and Means Committee colleague, Ms. Dunn, for her work on this
issue. And I commend the Chairman of the Committee, Mr. Archer, for his
long commitment to eliminating this unfair and unreasonable tax.
The death tax is bad tax policy. It is double taxation, because
individuals who pay taxes on income throughout their lives are taxed
again on the same income at their time of death on the value of their
property. The rates--up to 60 percent--are the highest in the tax code.
The death tax is bad policy not only because of the costs it imposes
after death--but also because of the costs it imposes during life. The
additional costs of life insurance, attorneys fees and estate planning
services cost hundreds of thousands of dollars every year.
The death tax is also an inefficient drag on our economy. The Joint
Economic Committee of Congress has reported that, while the death tax
generates about $23 billion annually in revenue for the federal
government, it also costs businesses, farmers and individuals another
$23 billion just in compliance costs.
Unfortunately, in the area I represent in Southwest Ohio, many family
farmers and family business owners just aren't prepared to deal with
the consequences of the death tax. According to a recent study by
Arthur Andersen's Center for Family Business, 28 percent of senior
generation shareholders of family businesses surveyed in Greater
Cincinnati had not completed any estate planning other than a will.
And, although 71 percent of these individuals wanted the family
business to stay in the family after their death, the study found that
less than 30 percent would be able to do so unless they better examined
the issues of estate taxes and planning.
Small businesses and family farms have made the American dream
possible for generations. At a time when 70 percent of family-owned
businesses do not survive to the second generaton, and only about 13
percent survive to the third generation, our tax laws should be
encouraging--rather than preventing--people to pass these assets to
their families.
We're losing too many family-owned businesses and family-farms as it
is. I urge my colleague to support the Death Tax Elimination Act--to
put an end to this unfair, inefficient and confiscatory tax.
Mr. DOOLEY of California. Mr. Speaker, I rise today in strong support
of this bipartisan legislation to repeal the federal estate tax over
the next ten years, and I salute Representatives Dunn and Tanner for
their long stewardship of this bill. As a family farmer myself and as
the representative of the most productive agricultural region of the
country, I have seen the impact that this tax has had on small
businesses and family-owned farms, and I believe
[[Page H4148]]
that the repeal of the estate tax will help ensure the survival of
these businesses into the next century.
Seventy percent of family businesses are not passed on to future
generations largely because of the burden imposed by estate taxes. In
particular, I would like to point out the impact of estate taxes on
family farms, since it is these family farms that drive the economy of
California's Central Valley, which I represent. The estate tax has a
devastating effect on family farmers who struggle to pass on their
farms to the next generation.
Since most family-owned farms do not earn the kind of profits
necessary to pay large estate tax bills, future generations are often
forced to mortgage or liquidate assets. As a fourth generation family
farmer, I have seen first-hand the difficulty that family members face
in trying to keep farms operating when each generation passes.
Eliminating the heavy burden the estate tax imposes on farmers will
help keep more of our farms in operation from generation to generation.
I would also argue that elimination of the estate tax would have a
positive impact on a number of the small rural communities that make up
the fabric of my district and much of this nation. These small rural
communities and the families that live there are highly dependent on
the continued operation of family farms and small businesses in the
area.
These family farms and small businesses employ the vast majority of
people in these small communities. If we are to continue to spread our
unprecedented national economic expansion to every corner of this
country--including our rural communities--we must work to ensure that
family farms and small businesses in these communities stay in
operation. Elimination of the estate tax will brighten these
communities' economic future.
I strongly support this legislation because I believe it will free
our family farmers and small businesspeople of the estate tax burden
that currently threatens their long-term survival, and strengthen our
small communities in the 21st century.
Mr. RILEY. Mr. Speaker, opponents to this bill argue that it will
only benefit the rich.
Well, Mr. Chairman, let's take a look at the group of ``rich'' people
this bill unfairly helps.
In my district, and in rural districts across the nation, the death
tax hits the farm family especially hard. Because of economies of scale
and the ever rising cost of equipment, they have become land and
capital rich.
Everyone should know by now, farmers live on the margin. They have
very modest incomes and in today's world most farm families are far
from ``rich.''
For year to year, farm families struggle simply to keep their heads
above water. They may be land rich, Mr. Speaker, but they are cash
poor.
Yet, when a farmer dies, we punish him for his hard work. Then we
force his family to sell the land they grew-up on to pay the estate
taxes and send them on their way.
The result, people who would like to carry on their family tradition
of farming are instead being forced to sell their land to wealthy land
developers who then turn that land into more cookie-cutter sub-
divisions and strip malls.
If you don't believe me, Mr. Speaker, take a drive out to Dulles
Airport some time. That all used to be farm land not so long ago.
The death tax is killing an American tradition and that's absolutely
appalling.
It's time we end this travesty and pass this bill.
The SPEAKER pro tempore (Mr. Kolbe). All time for general debate has
expired.
Amendment in the Nature of a Substitute Offered by Mr. Rangel
Mr. RANGEL. Mr. Speaker, I offer an amendment in the nature of a
substitute.
The SPEAKER pro tempore. The Clerk will designate the amendment in
the nature of a substitute.
The text of the amendment in the nature of a substitute is as
follows:
Amendment in the nature of a substitute offered by Mr.
Rangel:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Estate Tax
Relief Act of 2000''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
SEC. 2. 20 PERCENT REDUCTION OF ESTATE TAX RATES.
(a) In General.--Paragraph (1) of section 2001(c) is
amended to read as follows:
``(1) In General.--
``If the amount with respect to which the tentative tax is to be
The tentative tax is:
14.4% of such amount...................................................
$1,440, plus 16% of the excess of such amount over $10,000.............
$3,040, plus 17.6% of the excess of such amount over $20,000...........
$6,560, plus 19.2% of the excess of such amount over $40,000...........
$10,400, plus 20.8% of the excess of such amount over $60,000..........
$14,560, plus 22.4% of the excess of such amount over $80,000..........
$19,040, plus 24% of the excess of such amount over $100,000...........
$31,040, plus 25.6% of the excess of such amount over $150,000.........
$56,640, plus 27.2% of the excess of such amount over $250,000.........
$124,640, plus 29.6% of the excess of such amount over $500,000........
$198,640, plus 31.2% of the excess of such amount over $750,000........
$276,640, plus 32.8% of the excess of such amount over $1,000,000......
$358,640, plus 34.4% of the excess of such amount over $1,250,000......
$444,640, plus 36% of the excess of such amount over $1,500,000........
$624,640, plus 39.2% of the excess of such amount over $2,000,000......
$820,640, plus 42.4% of the excess of such amount over $2,500,000......
$1,032,640, plus 44% of the excess of such amount over $3,000,000''....
(b) Restoration of Phaseout of Unified Credit.--Paragraph
(2) of section 2001(c) is amended by striking ``$10,000,000''
and all that follows and inserting ``$10,000,000. The amount
of the increase under the preceding sentence shall not exceed
the sum of--
``(A) the applicable credit amount under section 2010(c),
and
``(B) the excess of the amount equal to 44 percent of
$3,000,000 over the amount of the tentative tax under
paragraph (1) on $3,000,000.''
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying, and gifts made,
after December 31, 2000.
SEC. 3. INCREASE IN EXEMPTION EQUIVALENT OF UNIFIED CREDIT.
(a) In General.--The table contained in section 2010(c)
(relating to applicable credit amount) is amended to read as
follows:
The applicable exclusion amount is:ts dying, and gifts made, during:
2000...................................................$ 675,000
2001, 2002, 2003, 2004, and 2005......................$1,100,000
2006 or thereafter.................................$1,200,000.''.
(b) Effective Date.--The amendment made by this section
shall apply to estates of decedents dying, and gifts made,
after December 31, 2000.
SEC. 4. INCREASE IN ESTATE TAX BENEFIT FOR FAMILY-OWNED
BUSINESS INTERESTS.
(a) Transfer to Credit Provisions.--Section 2057 (relating
to family-owned business interests) is hereby moved to part
II of subchapter A of chapter 11 of such Code, inserted after
section 2010, and redesignated as section 2010A.
(b) Increase in Credit; Surviving Spouse Allowed Unused
Credit of Decedent.--Subsection (a) of section 2010A, as
redesignated by subsection (a) of this section, is amended to
read as follows:
``(a) Increase in United Credit.--For purposes of
determining the unified credit under section 2010 in the case
of an estate of a decedent to which this section applies--
``(1) In general.--The applicable exclusion amount under
section 2010(c) shall be increased (but not in excess of
$2,000,000) by the adjusted value of the qualified family-
owned business interests of the decedent which are described
in subsection (b)(2) and for which no deduction is allowed
under section 2056.
``(2) Treatment of unused limitation of predeceased
spouse.--In the case of a decedent--
``(A) having no surviving spouse, but
``(B) who was the surviving spouse of a decedent--
``(i) who died after December 31, 2000, and
``(ii) whose estate met the requirements of subsection
(b)(1) other than subparagraph (B) thereof,
there shall be substituted for `$2,000,000' in paragraph (1)
an amount equal to the excess of $4,000,000 over the
exclusion equivalent of the credit allowed under section 2010
(as increased by this section) to the estate of the decedent
referred to in subparagraph (B). For purposes of the
preceding sentence, the exclusion equivalent of the credit is
the amount on which a tentative tax under section 2001(c)
equal to such credit would be imposed.''
(c) Conforming Amendments.--
(1) The table of sections for part IV of subchapter A of
chapter 11 of such Code is amended by striking the item
relating to section 2057.
(2) Paragraph (10) of section 2031(c) of such Code is
amended by striking ``section 2057(e)(3)'' and inserting
``section 2010A(e)(3)''.
(3) The table of sections for part II of subchapter A of
chapter 11 of such Code is amended by inserting after the
item relating to section 2010 the following new item:
[[Page H4149]]
``Sec. 2010A. Family-owned business interests.''.
(d) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying after December 31,
2000.
SEC. 5. CREDIT FOR STATE DEATH TAXES REPLACED WITH DEDUCTION
FOR SUCH TAXES.
(a) Repeal of Credit.--Section 2011 (relating to credit for
State death taxes) is hereby repealed.
(b) Deduction for State Death Taxes.--Part IV of subchapter
A of chapter 11 is amended by adding at the end the following
new section:
``SEC. 2058. STATE DEATH TAXES.
``(a) Allowance of Deduction.--For purposes of the tax
imposed by section 2001, the value of the taxable estate
shall be determined by deducting from the value of the gross
estate the amount of any estate, inheritance, legacy, or
succession taxes actually paid to any State or the District
of Columbia, in respect of any property included in the gross
estate (not including any such taxes paid with respect to the
estate of a person other than the decedent).
``(b) Period of Limitations.--The deduction allowed by this
section shall include only such taxes as were actually paid
and deduction therefor claimed within 4 years after the
filing of the return required by section 6018, except that--
``(1) If a petition for redetermination of a deficiency has
been filed with the Tax Court within the time prescribed in
section 6213(a), then within such 4-year period or before the
expiration of 60 days after the decision of the Tax Court
becomes final.
``(2) If, under section 6161 or 6166, an extension of time
has been granted for payment of the tax shown on the return,
or of a deficiency, then within such 4-year period or before
the date of the expiration of the period of the extension.
``(3) If a claim for refund or credit of an overpayment of
tax imposed by this chapter has been filed within the time
prescribed in section 6511, then within such 4-year period or
before the expiration of 60 days from the date of mailing by
certified mail or registered mail by the Secretary to the
taxpayer of a notice of the disallowance of any part of such
claim, or before the expiration of 60 days after a decision
by any court of competent jurisdiction becomes final with
respect to a timely suit instituted upon such claim,
whichever is later.
Refund based on the deduction may (despite the provisions of
sections 6511 and 6512) be made if claim therefor is filed
within the period above provided. Any such refund shall be
made without interest.''
(c) Conforming Amendments.--
(1) Subsection (a) of section 2012 is amended by striking
``the credit for State death taxes provided by section 2011
and''.
(2) Subparagraph (A) of section 2013(c)(1) is amended by
striking ``2011,''.
(3) Paragraph (2) of section 2014(b) is amended by striking
``, 2011,''.
(4) Sections 2015 and 2016 are each amended by striking
``2011 or''.
(5) Subsection (d) of section 2053 is amended to read as
follows:
``(d) Certain Foreign Death Taxes.--
``(1) In general.--Notwithstanding the provisions of
subsection (c)(1)(B) of this section, for purposes of the tax
imposed by section 2001, the value of the taxable estate may
be determined, if the executor so elects before the
expiration of the period of limitation for assessment
provided in section 6501, by deducting from the value of the
gross estate the amount (as determined in accordance with
regulations prescribed by the Secretary) of any estate,
succession, legacy, or inheritance tax imposed by and
actually paid to any foreign country, in respect of any
property situated within such foreign country and included in
the gross estate of a citizen or resident of the United
States, upon a transfer by the decedent for public,
charitable, or religious uses described in section 2055. The
determination under this paragraph of the country within
which property is situated shall be made in accordance with
the rules applicable under subchapter B (sec. 2101 and
following) in determining whether property is situated within
or without the United States. Any election under this
paragraph shall be exercised in accordance with regulations
prescribed by the Secretary.
``(2) Condition for allowance of deduction.--No deduction
shall be allowed under paragraph (1) for a foreign death tax
specified therein unless the decrease in the tax imposed by
section 2001 which results from the deduction provided in
paragraph (1) will inure solely for the benefit of the
public, charitable, or religious transferees described in
section 2055 or section 2106(a)(2). In any case where the tax
imposed by section 2001 is equitably apportioned among all
the transferees of property included in the gross estate,
including those described in sections 2055 and 2106(a)(2)
(taking into account any exemptions, credits, or deductions
allowed by this chapter), in determining such decrease, there
shall be disregarded any decrease in the Federal estate tax
which any transferees other than those described in sections
2055 and 2106(a)(2) are required to pay.
``(3) Effect on credit for foreign death taxes of deduction
under this subsection.--
``(A) Election.--An election under this subsection shall be
deemed a waiver of the right to claim a credit, against the
Federal estate tax, under a death tax convention with any
foreign country for any tax or portion thereof in respect of
which a deduction is taken under this subsection.
``(B) Cross reference.--
``See section 2014(f) for the effect of a deduction taken under this
paragraph on the credit for foreign death taxes.''
(6) Subparagraph (A) of section 2056A(b)(10) is amended--
(A) by striking ``2011,'', and
(B) by inserting ``2058,'' after ``2056,''.
(7)(A) Subsection (a) of section 2102 is amended to read as
follows:
``(a) In General.--The tax imposed by section 2101 shall be
credited with the amounts determined in accordance with
sections 2012 and 2013 (relating to gift tax and tax on prior
transfers).''
(B) Section 2102 is amended by striking subsection (b) and
by redesignating subsection (c) as subsection (b).
(C) Section 2102(b)(5) (as redesignated by subparagraph
(B)) and section 2107(c)(3) are each amended by striking
``2011 to 2013, inclusive,'' and inserting ``2012 and 2013''.
(8) Subsection (a) of section 2106 is amended by adding at
the end the following new paragraph:
``(4) State death taxes.--The amount which bears the same
ratio to the State death taxes as the value of the property,
as determined for purposes of this chapter, upon which State
death taxes were paid and which is included in the gross
estate under section 2103 bears to the value of the total
gross estate under section 2103. For purposes of this
paragraph, the term `State death taxes' means the taxes
described in section 2011(a).''
(9) Section 2201 is amended--
(A) by striking ``as defined in section 2011(d)'', and
(B) by adding at the end the following new flush sentence:
``For purposes of this section, the additional estate tax is
the difference between the tax imposed by section 2001 or
2101 and the amount equal to 125 percent of the maximum
credit provided by section 2011(b), as in effect before its
repeal by the Estate Tax Relief Act of 2000.''
(10) Paragraph (2) of section 6511(i) is amended by
striking ``2011(c), 2014(b),'' and inserting ``2014(b)''.
(11) Subsection (c) of section 6612 is amended by striking
``section 2011(c) (relating to refunds due to credit for
State taxes),''.
(12) The table of sections for part II of subchapter A of
chapter 11 is amended by striking the item relating to
section 2011.
(13) The table of sections for part IV of subchapter A of
chapter 11 is amended by adding at the end the following new
item:
``Sec. 2058. State death taxes.''.
(d) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying after December 31,
2000.
SEC. 6. VALUATION RULES FOR CERTAIN TRANSFERS OF NONBUSINESS
ASSETS; LIMITATION ON MINORITY DISCOUNTS.
(a) In General.--Section 2031 (relating to definition of
gross estate) is amended by redesignating subsection (d) as
subsection (f) and by inserting after subsection (c) the
following new subsections:
``(d) Valuation Rules for Certain Transfers of Nonbusiness
Assets.--For purposes of this subtitle--
``(1) In general.--In the case of the transfer of any
interest in an entity other than an interest which is
actively traded (within the meaning of section 1092)--
``(A) the value of any nonbusiness assets held by the
entity shall be determined as if the transferor had
transferred such assets directly to the transferee (and no
valuation discount shall be allowed with respect to such
nonbusiness assets), and
``(B) the nonbusiness assets shall not be taken into
account in determining the value of the interest in the
entity.
``(2) Nonbusiness assets.--For purposes of this
subsection--
``(A) In general.--The term `nonbusiness asset' means any
asset which is not used in the active conduct of 1 or more
trades or businesses.
``(B) Exception for certain passive assets.--Except as
provided in subparagraph (C), a passive asset shall not be
treated for purposes of subparagraph (A) as used in the
active conduct of a trade or business unless--
``(i) the asset is property described in paragraph (1) or
(4) of section 1221(a) or is a hedge with respect to such
property, or
``(ii) the asset is real property used in the active
conduct of 1 or more real property trades or businesses
(within the meaning of section 469(c)(7)(C)) in which the
transferor materially participates and with respect to which
the transferor meets the requirements of section
469(c)(7)(B)(ii).
For purposes of clause (ii), material participation shall be
determined under the rules of section 469(h), except that
section 469(h)(3) shall be applied without regard to the
limitation to farming activity.
``(C) Exception for working capital.--Any asset (including
a passive asset) which is held as a part of the reasonably
required working capital needs of a trade or business shall
be treated as used in the active conduct of a trade or
business.
``(3) Passive asset.--For purposes of this subsection, the
term `passive asset' means any--
``(A) cash or cash equivalents,
``(B) except to the extent provided by the Secretary, stock
in a corporation or any other equity, profits, or capital
interest in any entity,
[[Page H4150]]
``(C) evidence of indebtedness, option, forward or futures
contract, notional principal contract, or derivative,
``(D) asset described in clause (iii), (iv), or (v) of
section 351(e)(1)(B),
``(E) annuity,
``(F) real property used in 1 or more real property trades
or businesses (as defined in section 469(c)(7)(C)),
``(G) asset (other than a patent, trademark, or copyright)
which produces royalty income,
``(H) commodity,
``(I) collectible (within the meaning of section 401(m)),
or
``(J) any other asset specified in regulations prescribed
by the Secretary.
``(4) Look-thru rules.--
``(A) In general.--If a nonbusiness asset of an entity
consists of a 10-percent interest in any other entity, this
subsection shall be applied by disregarding the 10-percent
interest and by treating the entity as holding directly its
ratable share of the assets of the other entity. This
subparagraph shall be applied successively to any 10-percent
interest of such other entity in any other entity.
``(B) 10-percent interest.--The term `10-percent interest'
means--
``(i) in the case of an interest in a corporation,
ownership of at least 10 percent (by vote or value) of the
stock in such corporation,
``(ii) in the case of an interest in a partnership,
ownership of at least 10 percent of the capital or profits
interest in the partnership, and
``(iii) in any other case, ownership of at least 10 percent
of the beneficial interests in the entity.
``(5) Coordination with subsection (b).--Subsection (b)
shall apply after the application of this subsection.
``(e) Limitation on Minority Discounts.--For purposes of
this subtitle, in the case of the transfer of an interest in
an entity, no reduction in the amount which would otherwise
be determined to be the value of such interest shall be
allowed by reason of the fact that the interest does not
represent control of such entity if the transferor and
members of the family (as defined in section 2032A(e)(2)) of
the transferor have control of such entity.''
(c) Effective Date.--The amendments made by this section
shall apply to transfers after the date of the enactment of
this Act.
SEC. 7. TAX ON GIFTS AND BEQUESTS RECEIVED BY UNITED STATES
CITIZENS AND RESIDENTS FROM EXPATRIATES.
(a) In General.--Subtitle B (relating to estate and gift
taxes) is amended by inserting after chapter 13 the following
new chapter:
``CHAPTER 13A--GIFTS AND BEQUESTS FROM EXPATRIATES
``Sec. 2681. Imposition of tax.
``SEC. 2681. IMPOSITION OF TAX.
``(a) In General.--If, during any calendar year, any United
States citizen or resident receives any covered gift or
bequest, there is hereby imposed a tax equal to the product
of--
``(1) the highest rate of tax specified in the table
contained in section 2001(c) as in effect on the date of such
receipt, and
``(2) the value of such covered gift or bequest.
``(b) Tax To Be Paid by Recipient.--The tax imposed by
subsection (a) on any covered gift or bequest shall be paid
by the person receiving such gift or bequest.
``(c) Exception for Certain Gifts.--Subsection (a) shall
apply only to the extent that the covered gifts and bequests
received during the calendar year exceed $10,000.
``(d) Tax Reduced By Foreign Gift or Estate Tax.--The tax
imposed by subsection (a) on any covered gift or bequest
shall be reduced by the amount of any gift or estate tax paid
to a foreign country with respect to such covered gift or
bequest.
``(e) Covered Gift or Bequest.--
``(1) In general.--For purposes of this chapter, the term
`covered gift or bequest' means--
``(A) any property acquired by gift directly or indirectly
from an individual who, at the time of such acquisition, was
an expatriate, and
``(B) any property acquired by bequest, devise, or
inheritance directly or indirectly from an individual who, at
the time of death, was an expatriate.
``(2) Exceptions for transfers otherwise subject to estate
or gift tax.--Such term shall not include--
``(A) any property shown on a timely filed return of tax
imposed by chapter 12 which is a taxable gift by the
expatriate, and
``(B) any property shown on a timely filed return of tax
imposed by chapter 11 of the estate of the expatriate.
``(3) Transfers in trust.--
``(A) In general.--Any covered gift or bequest which is
made in trust shall be treated as made to the beneficiaries
of such trust in proportion to their respective interests in
such trust.
``(B) Determination of beneficiaries' interest in trust.--
For purposes of subparagraph (A), a beneficiary's interest in
a trust shall be based upon all relevant facts and
circumstances, including the terms of the trust instrument
and any letter of wishes or similar document, historical
patterns of trust distributions, and the existence of and
functions performed by a trust protector or any similar
advisor.
``(f) Expatriate.--For purposes of this section, the term
`expatriate' means--
``(1) any United States citizen who relinquishes his
citizenship, and
``(2) any long-term resident of the United States who--
``(A) ceases to be a lawful permanent resident of the
United States (within the meaning of section 7701(b)(6)), or
``(B) commences to be treated as a resident of a foreign
country under the provisions of a tax treaty between the
United States and the foreign country and who does not waive
the benefits of such treaty applicable to residents of the
foreign country.''
(b) Clerical Amendment.--The table of chapters for subtitle
B of such Code is amended by inserting after the item
relating to chapter 13 the following new item:
``Chapter 13A. Gifts and bequests from expatriates.''.
(c) Effective Date.--The amendments made by this section
shall apply to covered gifts and bequests (as defined in
section 2681 of such Code, as added by this section) received
on or after May 25, 2000.
The SPEAKER pro tempore. Pursuant to House Resolution 519, the
gentleman from New York (Mr. Rangel) and a Member opposed, will each
control 30 minutes.
The Chair recognizes the gentleman from New York (Mr. Rangel).
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, we have a decision today either to vote for the
political solution to this problem that has been offered by the
majority, where they know, and it is guaranteed, it would be vetoed
even though they do not promise relief for another 10 years, or to vote
for the substitute that gives immediate relief and they know, as I do,
that it will be signed into law.
Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr.
Cardin), the senior member of the Committee on Ways and Means, who
would explain more of this.
(Mr. CARDIN asked and was given permission to revise and extend his
remarks.)
Mr. CARDIN. Mr. Speaker, I thank the gentleman from New York (Mr.
Rangel) for yielding me this time.
Mr. Speaker, when we started the debate an hour ago, the gentleman
from Texas (Mr. Archer), my good friend, pointed out with pride that we
have balanced the Federal budget and that was one of his objectives
during his career. This is going to be his last year in this body and
we certainly, all of us, appreciate his service to our country.
But, Mr. Speaker, I would say to the gentleman that we want to make
sure that we continue to balance the budget in the future. That is why
I urge the gentleman to vote for the substitute.
See, 10 years from now we want to also make sure that we also have a
balanced Federal budget. Yet under the underlining bill, we will be
losing $50 billion a year at that point. And I want to make sure that
we have an affordable bill.
During general debate, it was interesting that there was a lot of
talk about the family-owned business and the family farm. As pointed
out, only 2 percent of the estates are subject to the estate tax, and
only 3 percent of that 2 percent have family farms or family-owned
businesses. Well, the substitute deals with that by immediately, now,
increasing the floor on those family assets to $4 million, taking
almost all of the taxable farms and almost all of the taxable family-
owned businesses out of the estate tax.
The underlying bill phases in over 10 years providing very low relief
in the next few years. As we pointed out, if we look at an estate worth
$1.5 million, under the substitute, because we immediately reduce the
estate tax by 20 percent and we immediately increase the unified credit
from $675,000 to $1.1 million, in that estate that is $1.5 million
under the Archer bill, they would still pay $277,000 in estate tax next
year.
{time} 1115
But under the Rangel substitute, that tax would be only 135 percent,
17 percent reduction versus a 60 percent reduction. We can do better,
and the Democratic substitute does better.
We also provide this in a fiscally responsible way. The Archer bill
spends $105 billion over 10 years and then balloons to $50 billion a
year. The Democratic substitute spends $22 billion over 10 years and
does not balloon at all.
The reason is that we close some loopholes in the estate tax. We not
only provide relief, but we reform the estate tax. For those estates
over $17 million who are receiving the benefit of a drafting error, we
correct that. For those minority-owned stock that are currently getting
unreasonable discounts, we correct that. So we provide
[[Page H4151]]
a fiscally responsible approach that deals with the problem.
Yes, we have family farms that are suffering, suffering under some of
our existing laws. But let us not help the .001 percent of the
multimillionaires. Let us take care of those who really need it.
Mr. Speaker, what concerns me is that if this bill became law, we are
going to have the scandalous avoidance of tax by billionaires. At the
same time, we are going to be jeopardizing our ability to pay Social
Security and Medicare. I do not think any of us want to be in that
position. Let us not create a scandal; let us do what is responsible.
Let us deal with the problem; let us support the Democratic substitute.
The SPEAKER pro tempore (Mr. Kolbe). Does the gentleman from Texas
(Mr. Archer) seek the time in opposition to the amendment in the nature
of a substitute?
Mr. ARCHER. I do, Mr. Speaker.
The SPEAKER pro tempore. The gentleman from Texas (Mr. Archer) is
recognized for 30 minutes.
Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume to
simply very briefly say to the gentleman from Maryland (Mr. Cardin) he
knows full well that nothing in this bill would jeopardize his Social
Security or Medicare. That should never be inserted in this debate
because nothing, nothing jeopardizes Social Security or Medicare in
this bill.
Mr. Speaker, I yield 4 minutes to the gentlewoman from Washington
(Ms. Dunn).
Ms. DUNN. Mr. Speaker, I might just mention that the gentleman who
has just completed his speech has just experienced in his own State of
Maryland the repeal of the death tax led by a Democrat legislature, a
Democrat government, and led in particular by Obie Patterson, a liberal
Democrat himself.
Mr. Speaker, as much as it excites me to listen to the opposition
talk about reducing the death tax, the substitute is a hollow attempt
to make it look like we are providing relief. It does not do the trick
here. Here are the four reasons why:
First, and perhaps most importantly, it does not repeal the death
tax. The substitute maintains the fundamental unfairness of the death
tax. It says that, at the end of one's life, after one has worked hard,
one puts one's heart and soul into building a business or a farm to
provide a legacy for one's family, the Government still is entitled,
in, many cases, to more than half of the fruits of one's labor.
I cannot accept this because it is so grossly in violation of the
fundamental virtues of this Nation: thrift, diligence, risk taking,
hard work. Ninety-five percent of Americans believe it is wrong.
Ninety-five percent of Americans, Mr. Speaker, believe that it is wrong
to tax income during one's life and then tax the same assets again just
because one dies.
Secondly, the current death tax rates are the second highest in the
industrialized world. The only nation that is higher than us in death
tax is Japan at 70 percent. Under the substitute, the United States
still would have the second highest death tax rate in the world, behind
bastions of free market capitalism like France and Sweden. Our
international competitors have recognized the unfairness of this tax.
It is time now for the United States Congress to recognize it as well.
Third, opponents of H.R. 8 say they can exempt family-owned farms and
businesses by raising the family-owned business exception to $2
million. It will not work. It has already been tried. It has already
been proved to fail.
Let me explain. When the Treasury Department came out with their
figures saying that only 3 percent of estate tax returns are primarily
composed of farm and business assets, I wanted to know what they
wanted. I did not argue with their number. I wanted them to explain.
So I called the Office of Tax Analysis at Treasury to ask them what
their definition of ``primarily comprised'' is. Their answer? At least
50 percent of the overall value of the estate.
What the opponents of H.R. 8 do not tell us is that, in order to
qualify for the family-owned business exemption, at least 50 percent of
the overall value of the estate must be comprised of business or farm
assets.
What about the individual's home? How about the 401-K or any other
savings? What about any assets in that estate that are not the business
or the farm? This definition hurts especially small family-held farms
and businesses.
So if they do believe their Treasury numbers, which they must believe
because they have been touting them throughout the debate, they must
concede what we have always known, that only 3 percent of family farms
and businesses will ever qualify for their relief. Their own Treasury
analysis exposes the false relief they are proposing.
Fourth and last, the substitute raises the death tax burden on all
States at the same time it reduces rates. Under current law in States
that still have estate tax laws, a family will receive a Federal death
tax credit equal to their State death tax liability. This substitute
eliminates the tax credit for States that have a death tax.
The net result is that the substitute slightly reduces the rate, but
this is offset by an increase in their death tax liability because of a
loss of the credit.
The substitute raises taxes, maintains high death tax rates, provides
hollow relief for family farms and businesses. Most importantly, it
retains the death tax.
There is only one way to rid the Code of this immoral, unfair,
onerous, economically unsound tax, and that is to eliminate it.
I urge my colleagues to reject this substitute. Let us get rid of the
death tax once and for all. Support H.R. 8.
Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Stenholm).
(Mr. STENHOLM asked and was given permission to revise and extend his
remarks.)
Mr. STENHOLM. Mr. Speaker, there is agreement from both sides of the
aisle today that there are very real problems with the estate tax that
we need to address.
Some small businesses and family farms cannot be passed from
generation to generation because the estate taxes imposed upon the
death of the owner plays too great a financial responsibility burden on
the remaining family. This is wrong.
But I encourage my colleagues to examine carefully the substance of
H.R. 8 and the Democratic alternative to see which proposal actually
delivers the relief we all want to provide.
I want to bring estate tax relief to the people I represent in the
17th district of Texas. Family farmers and small business owners. But I
want to do so from a fiscally responsible way, that which does not harm
debt reduction or endanger necessary programs, such as defense, Social
Security, Medicare, veterans programs. That is why I support the
Rangel-Cardin-Stenholm substitute and oppose H.R. 8.
Unlike H.R. 8, the Democratic alternative does not threaten Social
Security and Medicare, with all due respect to the gentleman from Texas
(Mr. Archer). The back-end loaded costs of the bill will threaten our
ability to meet the challenges facing Social Security. This explosion
in costs will come at the exact time the Social Security and Medicare
trust funds will begin to face financial challenges and the Treasury
will have to redeem the assets held by the trust funds to pay the
benefits.
The Democratic alternative provides immediate estate tax relief. The
$4 million per family exclusion for farms and small businesses, the 20
percent across-the-board rate reduction for all estates, and increase
in the unified credit of $1.1 million in the Democratic alternative
would all take effect immediately.
By contrast, H.R. 8 would make small businesses and family farmers
wait for 10 years to receive the amount of relief that would be made
available January 1, 2001, under the Democratic alternative. I would
ask my friends on the other side of the aisle, why should we make them
wait 10 years before they get the relief we have all been talking about
today?
The Democratic alternative is much more fiscally responsible than
H.R. 8. H.R. 8 would cause an enormous long-term revenue loss which
will undermine the fiscal discipline that has produced a strong economy
and jeopardized our ability to retire our national debt.
Many of my colleagues have stood here and made statements that I
totally agree with. It is not the Government's money; it is the
people's money.
[[Page H4152]]
But how quickly we forget it is the people's debt, $5.7 trillion. How
quickly we ignore the Social Security unfunded liability of $7.9
trillion when it comes to a tax cut that is politically popular to a
few folks today.
Let us stay with fiscal responsibility. The Democratic alternative
does a much better job of targeting. It would immediately exempt 99
percent, 99 percent of family farms and estates from estate taxes and
reduce the number of estates subject to the estate tax by 50 percent.
The Democratic alternative provides meaningful relief which can
become law. We can give the relief that we are all concerned about and
give it immediately. H.R. 8 will not do so.
Mr. ARCHER. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Florida (Mr. Shaw), a respected member of the Committee
on Ways and Means, the chairman of the Subcommittee on Social Security.
Mr. SHAW. Mr. Speaker, much has been said on this floor that is
simply not true. What is threatening Social Security today? The
inaction of the other side of the aisle, the uncooperative spirit, not
all Members. I am not speaking to all Members there. But we have
reached out to the Democrats time and time again with the Archer-Shaw
proposal.
We have been met with this wall of silence. We have reached out to
the President who made this his big promise in facing the Nation,
standing right behind where I am standing today. We have been met with
a wall of silence. That is what is threatening Social Security today,
not elimination of the death tax.
What I think has been missing from this debate and is certainly
missing from the substitute is the answer to the question that each
Member should ask themselves as they come down here to vote today.
Is the death tax a just tax? Should the event of death be taxed by
the United States Congress and collected by the Internal Revenue
Service? Should the family have to meet with the Internal Revenue
Service the same day they meet with the undertaker? Is that a just tax?
Is it a just tax? Is it a just tax that will destroy jobs and destroy
businesses and destroy family farms? Is that a just tax? Is it a just
tax to tax again at the highest rate that we have in our whole tax
system, funds and wealth that has already been taxed by our income tax
and God knows how many other taxes? Is that a just tax?
I think the resounding answer is no. That is not a just tax. To say
we are going to lessen the effect of it by the substitute that does not
make it an even more or any more just tax. The fact that maybe the
wealthy are getting, or top 2 percent are the only estates that are
being taxed in this country, is that a reason to keep an unjust tax?
That is not what this country is all about. That is not what this
Congress is all about.
Let us reject the substitute. Let us get rid of this unjust tax, and
let us vote to repeal the death tax forever more.
Mr. STENHOLM. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Neal), a member of the Committee on Ways and Means.
(Mr. NEAL of Massachusetts asked and was given permission to revise
and extend his remarks.)
Mr. NEAL of Massachusetts. Mr. Speaker, of all the taxes that could
be repealed, this is perhaps one of the least justified. The rhetoric
would state that the Federal Government is decimating the lives of
millions of families yearly by snatching away their hard-earned savings
just when they are most vulnerable, driving small business and farm
families into oblivion while squeezing every penny possibly out of
them.
The facts have been stated before, but let me state them again. Only
2 percent of the families are even subject to estate tax under current
law. Of this 2 percent, only 3 percent are families with small
businesses or farms. In other words, for every 10,000 estates, only six
of them are farms or small businesses subject to the estate tax. To put
it visually, if this piece of paper represents all estates, then this
tiny part of it represents the issue in front of us today and what we
are about to do.
Of course half of the people in my district think they are going to
pay. That misconception is what makes this work politically.
Acknowledging reality, however, does not mean that there are no steps
we can take to ease the problem for those who are subject to the estate
tax or ease the minds of those who think they are. Those steps are
represented today by the Democratic substitute.
Our substitute reduces the maximum tax rate by 20 percent to 44
percent. It increases the current $1.3 million exclusion to small
businesses and farms to $4 million for a married couple, and it
immediately increases the general exception to $1.1 million.
I had some small businessmen come by the other day. I explained to
them what we were about to do. They said that is more than we need,
based on the approach by the gentleman from New York (Mr. Rangel).
I came to Congress in 1988, but even I remember a time when a Member
could get something into a House bill, see it dropped in conference and
feel bad about it. Now Members seem to crow about getting a bill to
pass the House that everyone knows is designed to die.
{time} 1130
In Washington, representatives do their clients and we do our
constituents a disservice by participating in such a farce. We face a
choice: Support a compromise that provides significant relief for all
estates, but especially small businesses and family farms; or kill the
bill once again around here and get nothing. That is the vote on the
floor today.
I suspect the majority intend to vote to kill the bill and get
nothing. But, my God, let us not ask for credit for having done that.
Mr. ARCHER. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from
Missouri (Mr. Hulshof), another respected and distinguished member of
the Committee on Ways and Means.
Mr. HULSHOF. Mr. Speaker, I thank the gentleman for yielding me this
time, and, Mr. Speaker, a recent editorial in the Washington Post
earlier this week denounced our actions today and the title of the
editorial was Government by Bumper Sticker. And, of course, the
editorial set out many of the same arguments we have heard from those
on the other side.
I guess if I were to think of a bumper sticker, it would be one I saw
over the break of the Memorial Day recess. The bumper sticker on the
back of this RV traveling the highways of Missouri said, I am spending
my kids inheritance. Now, I will confess, I took a quick double take to
make sure the occupants of that RV were not my own parents on a cross-
country spending spree. But then I began to think about the gist of
that sticker, and how it is that in some instances it is cheaper to
dispose of family assets before death than passing it on to our
descendants and making them sell off those family assets after death.
I suppose our friends on the other side will say we should take some
solace in the fact that at least predeath that they are enjoying the
fruits of their labor rather than collecting those fruits, bringing
them here to Washington and then letting 535 Members of the House and
Senate decide how to spend the fruits of those labors. But I say, no.
And with all due respect, and with high regard for my friend from New
York and his substitute, I guess if I were to pick a bumper sticker for
the substitute it would be Mend It, Don't End It.
I would ask the gentleman and everybody that would say we should not
have a complete repeal to justify for me the continuation of the
inheritance tax. And I see my friend from Vermont would like to justify
for us why he believes we should not do that, and I will let him do so
on his time, but knowing his political ideology, I imagine it would be
that we should redistribute wealth in this country. And I appreciate
that, yet we already have a redistribution of wealth in this country
through the progressive tax rates and the fact that we deny tax
deductions and credits for those that are successful in this country.
What has not been discussed here is the economic cost of compliance
and avoidance of the tax. The fact is that the Joint Economic Committee
says that in 1998, $23 billion were spent to avoid the tax. The same
amount that we generated in revenue. My colleagues, it is time to be
bold. And with
[[Page H4153]]
all due respect to the substitute and the intent behind it, if I were
again to pick out a bumper sticker that I support it would be ``It's
Time to Give the Death Penalty to the Death Tax.'' Reject the
substitute and vote in favor of H.R. 8.
Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from
Vermont (Mr. Sanders) in order to respond to the previous speaker.
Mr. SANDERS. Mr. Speaker, the gentleman said, well, why should we not
repeal the estate tax. Let me tell him why. There are millions of
Americans in this country, senior citizens, who suffer and die because
they cannot afford prescription drugs. And this country does not have a
strong program to say to the sick that they can get the prescription
drugs they need without taking money out of their food budget.
What the gentleman is doing today is giving the wealthiest 2 percent
of the population, billionaires, a huge tax break. And then my
colleagues will come before the American people and say, gee, we do not
have the money to protect the sick and the old.
In my district there are middle-class families who are going deeply
into debt so that they can send their kids to college, and some of
these kids graduate college $50,000 in debt. And what my colleagues are
saying today is, hey, Bill Gates and his friends, who contribute huge
amounts of money to the political process, to the Republican Party,
they need a tax break. I say that is immoral.
There are families in this country who work 40 hours a week and they
sleep in their cars because we have not put money into affordable
housing. Yet my colleagues say, hey, I have millionaire friends who
have gone to a $25,000 a plate fund raiser, we have to give them a tax
break. And my colleagues say, we do not have money for affordable
housing, we do not have money for education. There are 44 million
people in this country who have no health insurance, but my colleagues
say we cannot afford that because they are too busy giving tax breaks
to the richest people in this country.
I have heard my Republican friends use the word immoral and unjust to
describe the estate tax. I will tell them what is immoral and unjust.
It is immoral and unjust that we give tax breaks to those people who do
not need it while we ignore the suffering of millions and millions of
people who need help today. That is why.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentlewoman from
North Carolina (Mrs. Myrick).
Mrs. MYRICK. Mr. Speaker, I would like to share a poem that I think
says it all in our debate today.
Tax his cow, tax his goat, tax his pants, tax his coat;
Tax his crops and tax his work, tax his tie and tax his
shirt;
Tax his shoe, tax his smoke, teach him taxes are no joke;
Tax his tractor, tax his mule, teach him taxes are the rule;
Tax his oil, tax his gas, tax his notes, and tax his cash;
If he hollers, tax him more, tax him till he's good and sore;
Tax his coffin, tax his grave, put these words upon his tomb:
``Taxes drove me to my doom.''
After he's gone, he can't relax, they'll still go after Death
tax.
I would like to urge all my colleagues to vote against the Rangel
substitute.
Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Florida (Mrs. Thurman), a member of the Committee on Ways and Means.
Mrs. THURMAN. Mr. Speaker, I thank the gentleman for yielding me this
time.
Over the years, Mr. Speaker, all of us have heard from small business
owners and family farmers who want to pass on to their descendents the
fruits of their labor, and I empathize with them. And I have worked, as
many of us have, to have estate tax relief for them. Particularly, and
most noted, was the Taxpayer Relief Act of 1997. The law specifically
helps owners of small businesses and family farmers.
But like many of my colleagues, I want to provide more help to those
involved in family farms or small businesses. So this year, once again,
I would like to support a fiscally responsible alternative that focuses
estate tax relief where it is needed. The alternative would cut estate
tax 20 percent across the board, reducing the maximum rate to 44
percent. The proposal would provide a transferable $2 million exclusion
for farms and small businesses. That means a married couple with a farm
or a small business would receive a $4 million estate tax exclusion.
Mr. Speaker, I urge my colleagues, especially those in agriculture,
to see what the alternative means for them. Based on a 1998 USDA
survey, only 1.5 percent of farms have a net worth of more than $3
million. In other words, more than 98 percent of the farmers benefit
from the alternative that I am going to support.
The alternative has three other advantages over H.R. 8. First, it
takes effect, which we have heard, in 2001 rather than in 10 years. If
a person happens to die before 2010, that person's heirs will not enjoy
the full benefit of H.R. 8. Second, it costs far less than H.R. 8;
around $2 billion a year. Finally, we have heard, unlike H.R. 8, the
alternative could be signed into law.
Let us look at the cost factor. By the time it is fully implemented
in 2010, H.R. 8 will cost $50 billion a year. If the House were really
interested in helping the living, it might have considered using the
money in other ways. A bipartisan bill I am going to talk about with
people on Ways and Means is H.R. 957. I talked to my farmers. They need
relief today, not when they are dead. They said, give me the farm and
ranch risk management, which I have supported and introduced with my
fellow Republicans, which would give all growers an ability to defer
taxes in good years and use the money in lean years. This bill costs
$100 million a year, not billions.
There are all sorts of other bills, including one to provide a
capital gains tax exclusion for farms similar to the ones given on
homes. Well, we cannot find the funds for these and other proposals to
help businesses, but we can find $104 billion in H.R. 8. But if H.R. 8
is vetoed, then thousands of taxpayers who operate family businesses
gain nothing.
I wonder which is better for family businesses, a bill that will not
become law or a bill that helps them?
Mr. ARCHER. Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman
from North Carolina (Mrs. Clayton).
Mrs. CLAYTON. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, this bill is a proposal to eliminate the estate tax in
the future. The bill and the Democratic alternative will allow the
continuation of something and the beginning of something. These are
proposals to maintain small family farms and small family businesses.
These are proposals that preserve the important past by protecting the
precious future.
I intend to vote for both proposals. The Democratic alternative
provides greater relief, more immediately. Providing up to $4 million
would indeed help many small farmers and small businesses. H.R. 8, on
the other hand, would repeal the tax all together. That is an
attractive proposal. It is also, we must recognize, is a costly
proposal.
As we seek to save the small family farm or business, we must also
make sure we do not sacrifice Social Security, Medicare, or other
progress made in reducing and eliminating the debt. I am hopeful that
as we proceed with this legislation to provide estate tax relief, we
will continue our fiscal responsibility.
Reducing or eliminating the estate tax is an essential thing to do.
It is the prudent thing to do. It is the right thing to do. By doing
what is prudent and right, we can ensure that the lifeblood of many
American families, the small farm and the small business, will continue
to survive.
Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
New Jersey (Mr. Rothman).
Mr. ROTHMAN. Mr. Speaker, I thank the gentleman from New York for
yielding me this time.
My friends, the American estate tax system is 85 years old. Who
supported the creation of the American estate tax system? Well, one of
the first supporters was Republican President Theodore Roosevelt. Why
would he do such a thing? Well, he did not want to have two America's,
a have and a have not. What do we have today in America? We have a
nation where the top 1 percent of our people, the top 1 percent, own 40
percent of the Nation's assets, twice the amount held by them in the
past 20 years.
[[Page H4154]]
Today, my friends, the House has a choice: The Democrat plan to
reform the estate tax system, a reform plan that would leave 99 percent
of Americans paying no estate tax and still cutting the estate tax for
the top 1 percent; or the Republican plan, on the other hand, which
adds another $40 billion in cost a year in order to eliminate the tax
for the top 1 percent.
My friends, I believe that most Americans feel that that $40 billion
extra would be better spent going to save Social Security and Medicare,
or paying down our $5.6 trillion national debt, which is now being
assumed by our children, or providing prescription drugs for our
seniors, strengthening our military, fixing our public schools and
providing health care for 45 million uninsured Americans.
The time may come when our country can afford to entirely eliminate
the estate tax for the top 1 percent, but not today. Let us eliminate
taxes for 99 percent of Americans, cut taxes for the top 1 percent, and
pass the Democrat reform plan.
Mr. ARCHER. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from
Louisiana (Mr. McCrery), another respected and distinguished member of
the Committee on Ways and Means.
Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me this
time.
Several Members in support of the Rangel substitute, Mr. Speaker,
have begged us to adopt the Rangel substitute because their farmers
need help now. Well, I find it curious that the Farm Bureau has
endorsed not the Rangel substitute but the underlying bill, which I
hope will pass this House today. That is real relief to farmers, not
the Rangel substitute.
Let me talk about why that is. Three years ago, in 1997, I was the
author of a bill to do what the Rangel substitute attempts to do today;
that is to give a higher exemption, so to speak, to family farms,
family businesses from the estate tax. I pursued that course for two
reasons. Number one, in 1997, we were not expecting the huge surpluses
at the Federal level that we are today. We had very much more limited
revenue over expenditures to work with for any tax cuts. So I chose a
route to try to do the most good with the estate tax that I could with
the limited dollars that we had to spend. And the route I chose was to
try to direct the relief at family farms and family-held businesses.
We got a lot of support for that route. We finally got some of my
bill into the tax bill that was signed by the President in 1997, and
that became law. And since then, those family farms and family
businesses have been eligible for a higher exemption from the estate
tax than everybody else. Unfortunately, I was wrong in 1997. That
relief that we tried to give family businesses and family farms has not
taken place. Why? The Committee on Ways and Means heard testimony last
year from tax experts and, indeed, from the National Federation of
Independent Businesses, who had backed my proposal in 1997, and they
told us that that attempt to exempt family farms and businesses from
part of the estate tax has not worked because it is too complex.
There is no way to ensure that a family looking forward can comply
with all of the requirements that are necessary to qualify for that
exemption. As a consequence, we just have not been able to bring those
family farms and businesses under this exemption. It was well-
intentioned, I was well-intentioned in 1997, I think it is well-
intentioned today, but it will not work.
So I will ask my colleagues in this House to reject the attempt of
the gentleman from New York (Mr. Rangel) to simply expand on the failed
attempt that I made in 1997 to help family farms and businesses and,
instead, to go with the Archer bill today that repeals the estate tax
once and for all. We phase it in over 10 years. It is a responsible
plan. We have the revenue to do it, and there is no reason to continue
this extremely unfair, I would submit the most unfair, part of our Tax
Code.
Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Maine (Mr. Allen).
Mr. ALLEN. Mr. Speaker, I thank the gentleman for yielding me this
time.
Here we go again, another week, another irresponsible Republican tax
cut. Now, I believe that we do need to provide immediate estate tax
relief for those who own family businesses, but this Republican repeal
of the estate tax costs so much, $50 billion a year when fully phased
in, that it does threaten Social Security and Medicare, and makes much
less likely the chance that we will provide prescription drug coverage
for our seniors.
Now, I have talked to a lot of small business owners in my district
of Maine, and the stories they tell are compelling, and Congress should
do more to lift the tax burden on these essential family businesses,
family businesses that make up a large part of the life of our smaller
communities. The Democratic alternative would provide immediate tax
relief to closely-held businesses and family farms by reducing all
estate tax rates 20 percent across the board and increasing the small
business exclusion to $4 million per family. This Democratic
alternative is a step in the right direction and provides more
immediate relief than the Republican plan.
Now, let us be clear. The President will veto H.R. 8. So the choice
for us today is clear: An irresponsible tax plan, with costs that
explode in the future, threatening Medicare and Social Security for the
baby-boom generation; or a bipartisan plan that will provide immediate
tax relief to those who truly need it.
Vote ``yes'' on the Democratic substitute and reject H.R. 8.
Mr. ARCHER. Mr. Speaker, may I inquire how much time remains on each
side?
The SPEAKER pro tempore (Mr. Kolbe). The gentleman from Texas (Mr.
Archer) has 14\1/2\ minutes, and the gentleman from New York (Mr.
Rangel) has 13 minutes.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Cox).
{time} 1145
Mr. COX. Mr. Speaker, it has been instructive to listen to the
debate, because we are coming together, Democrats and Republicans, to
appreciate that the death tax is unfair. It is unfair, because it is a
double tax on the aftertax lifesavings of an individual.
The only cavil that seems to be, not all but some Members on the
minority side have is, first, that the death tax is expensive, by which
they mean it raises revenue that we might lose if we repeal it, and,
second, that it is a way to keep us from having two Americas of haves
and have nots.
But the truth is the death tax is expensive in a way that perhaps
these people do not quite apprehend. It is expensive to collect. Every
time we try to collect the death tax, we get thrown into a lawsuit that
lasts for years. It is one of the most expensive taxes to collect that
we have on the books.
It reduces other taxes, such as income taxes that we collect, because
as a tax avoidance scheme, people give away money during life and,
thus, reduce, because they get a deduction, they reduce the taxes that
otherwise they might owe.
The Secretary of the Treasury, Lawrence Summers, in fact told us this
when he was a Harvard economist just a few years ago that this tax
might very well lose money for the Federal Government. So by repealing
it, we should not worry that it is too expensive. The only expense that
we are relieving is that on the American people. Second, this tax which
was meant 85 years ago by Teddy Roosevelt to avoid undue concentration
of wealth has resulted in just the opposite. We break up, not
concentrations of wealth, but farmers and small businesses which are
acquired by multinational corporations and real estate developers. That
is why environmental groups are supporting complete repeal.
The substitute would keep all the complexities of the more than 80
pages of the Internal Revenue Code that are devoted to the death tax.
When tax simplification is the cry of the American people, this is the
best opportunity that we will have to achieve that result.
The substitute would raise taxes on families by repealing the current
tax credit for State taxes. Let us not raise taxes. Let us cut them.
Let us eliminate complexity. Let us do the right thing. Vote down the
substitute and vote aye on H.R. 8.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from
Massachusetts (Mr. Capuano).
[[Page H4155]]
Mr. CAPUANO. Mr. Speaker, I just rise to ask a few questions. I have
heard an awful lot of comment today about how immoral, unethical, and
somehow evil the estate tax is. Well, obviously, we can have
philosophical agreements, but I would ask if that is the case, as of
right now today, there are 16 States that have their own estate tax of
significant nature, 7 of those have a complete Republican-controlled
legislature and governor, none of them have repealed it.
Are they completely immoral and unethical, or are they just wrong? If
they are just wrong, maybe we better get on the phone and call them and
tell them that. And when we do, maybe we need to suggest to them how
they are going to raise the $6 billion that they raised in the last
year to pay for policeman, fireman, teachers and et cetera.
And on top of that, I just want to repeat what I said earlier, it is
not a 50 percent tax, it is a 20 percent tax at this point. The
democratic substitute will lower it to a 16 percent tax. The average
person after tax, after tax, the average person who is subject to this
tax will still have $2.7 million left. My gosh, how difficult it must
be to get by on that amount of money.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to another respected and
distinguished member of the Committee on Ways and Means, the gentleman
from Michigan (Mr. Camp).
Mr. CAMP. Mr. Speaker, I thank the gentleman from Texas (Mr. Archer),
for yielding me the time, and I thank him for his leadership on this
very important issue.
Mr. Speaker, I rise in strong support of H.R. 8, a bill to repeal the
death tax. Small businesses and family farms are the lifeblood of our
economy. Yet we have a tax system which unfairly taxes these small
business employers and farmers twice. Less than half of all family-
owned businesses survive the death tax and only about 5 percent survive
to the third generation.
After being taxed two, three or four times, Uncle Sam taxes us again
at 55 percent when we die. At a time when families need to be thinking
about what they can do to bounce back from such a tragedy, they have to
worry about taxes. Fiftyfive percent is high enough, but it is 100
percent penalty on employees of small businesses and family farms who
lose their jobs when their company or farm is liquidated to pay the
death tax.
Since its beginning, America has been about building a better life
for people and their children. A farmer's commitment to not sell his
farm, to invest his profits in his farm, and to continue working
instead of retiring, that is what America is all about. And there is
nothing more un-American than telling that farmer and family, you are
going to have to give the fruits of your labor and your children's
future to the government.
Mr. Speaker, death by itself should not trigger a tax. The 50,000
farmers in Michigan deserve to have this tax repealed. Let us give them
the opportunity to focus their attention on building their farms and
providing for their children, rather than figuring out to avoid losing
their farm to the government.
Mr. RANGEL. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Indiana (Mr. Hill).
Mr. HILL of Indiana. Mr. Speaker, I thank the gentleman for yielding
me the time.
Mr. Speaker, I respect thousands of family farmers in southern
Indiana. I have family members who operate family farms. I understand
how the estate tax can cause a lot of hardship for asset-rich and cash-
poor family farms. It sometimes can prevent farmers from passing their
farms on to their children which is a real tragedy.
I support the substitute to this bill, because it sends immediate
estate tax relief for the family farmers and small businesses who
really need it. The majority proposal requires farmers and small
businesses to wait 10 years for estate tax relief. Family farmers and
small business operators need estate tax relief now, not 10 years from
now.
Mr. Speaker, I also support the substitute to H.R. 8, because unlike
the Majority proposal, it offers estate tax relief in a fiscally
responsible way. When it is fully implemented, H.R. 8 will costs $50
billion a year which threatens our hard-won balanced budget.
I believe it is more important to continue paying down the national
debt and protecting Social Security and Medicare than giving a tax
break to people whose estates are worth tens or even hundreds of
millions of dollars.
Mr. Speaker, I urge my colleagues to support the substitute.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
Arizona (Mr. Hayworth), a respected and distinguished member of the
Committee on Ways and Means.
Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from Texas (Mr.
Archer), the chairman of the Committee on Ways and Means for yielding
me the time, and I rise in opposition to the substitute offered by the
ranking member of our committee.
Here is the fundamental reason why I rise in opposition:
{time} 1200
Mr. Speaker, this would leave in place all the intricacies, the
infrastructure, if you will, in law of the death tax. There are those,
as has been aptly illustrated in this body, there are those intent on
raising taxes. There are those who believe in a radical redistribution
of wealth, and those who have stood to defend the death tax essentially
are accepting the notion of double taxation. This keeps in place all of
the complexities, and it would actually raise taxes on families by
repealing the current tax credit for State taxes. So that is something
very, very important to remember.
The other thing I would point out today to the body, Mr. Speaker, is
that having listened with interest to my good friend who joined us from
Indiana and who offered his point of view on this, if the substitute is
such a good idea, why does the American Farm Bureau embrace the
complete repeal of the death tax? Why does the National Hispanic
Chamber of Commerce, why does the National Black Chamber of Commerce
join with a bipartisan majority to embrace total repeal of the death
tax? It is because of efforts, well-intentioned though they may be, by
some on the left to leave in place the infrastructure and bit by bit,
brick by brick, element by element, reintroduce and expand the death
tax.
I would remind our body collected here today, Mr. Speaker, that
during a previous Congress, indeed, the 103d Congress, there was a move
afoot to expand death taxes. We do not want that. Let us repeal the tax
and vote against the substitute.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from
California (Ms. Millender-McDonald).
Ms. MILLENDER-McDONALD. Mr. Speaker, I thank the gentleman for
yielding me this time. I rise today in strong opposition to H.R. 8 and
in strong support for the Democratic substitute.
Once again, the Republicans have shown us their recklessness by
spending the budget surplus on an irresponsible tax cut for their
special interest allies with no investment in Social Security and
Medicare. Furthermore, just yesterday we were here discussing the
massive cuts to our Education, Health and Labor Departments. How can we
today stand here in good conscience and debate spending $105 billion on
tax cuts when yesterday we could not even guarantee that all of our
children will have a quality education in this, the richest country in
the world.
Mr. Speaker, I strongly support providing relief to smaller estates,
family-owned small businesses and farms; but I believe that we can do
this in a more fiscally responsible way with targeted relief. The
Republican bill does not represent targeted relief; it represents
preferential treatment. It seeks to benefit only 2 percent of
Americans, and yet, with H.R. 8, it is evident that the Republicans
feel that only 2 percent of Americans should be represented.
Well, I am here representing the other 98 percent, and I say no to
H.R. 8.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from North
Carolina (Mr. Coble).
Mr. COBLE. Mr. Speaker, I thank the gentleman for yielding me this
time. I commend him and his very fine leadership on this, what I have
called, traditionally, the most onerous tax in the Code. It is a
disincentive against savings, a disincentive against investing.
I have heard countless presentations from this floor yesterday and
today about horror stories where people who are not wealthy by any
means have
[[Page H4156]]
been devastated as a result of the imposition of the estate tax. Call
it the estate tax, call it the inheritance tax, but call it what it is:
the death tax. Mr. Speaker, I commend the chairman of the Committee on
Ways and Means and our Democrat friends that have supported us in this
bill. This is a bill that is long, long overdue and should be enacted;
and I urge its support.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from
Connecticut (Ms. DeLauro).
Ms. DeLAURO. Mr. Speaker, the Democratic substitute provides targeted
tax relief for middle-class families, small business owners, and
farmers without putting at risk or fiscal discipline, our investments
in education, and targeted tax relief that we could be providing to
America's middle-class families.
The Republican tax break is another example of their misguided
priorities. Before they have done anything to strengthen Social
Security and Medicare or provide a prescription drug benefit for our
seniors, they provide a tax break to the wealthiest 2 percent of all
Americans who control 40 percent of the wealth in this Nation. It comes
out to $105 billion over the next 10 years, over $50 billion in tax
cuts to the richest people in the United States. That is their idea of
tax fairness: millions for the rich, not a penny for the middle class.
We have heard a lot about family farms and small businesses. Well,
the Democratic tax cut ensures that the family farm will be passed on.
It guarantees small businesses can continue as family-owned businesses.
It provides immediate tax relief to these families, and it does this
without squandering our surplus, undermining Social Security and
Medicare, or risking our investments in education, health for our
seniors. Vote for the Democratic substitute.
Mr. ARCHER. Mr. Speaker, I reserve the balance of my time.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentlewoman from
Florida (Ms. Brown).
Ms. BROWN of Florida. Mr. Speaker, do not be fooled by the
spinmasters on the right. They are solving a problem that does not even
exist, while the poorest in America who do not enjoy our great
prosperity continue to be ignored by the leadership of this House.
We need real priorities: the Older Americans Act, which provides
meals and other services to our seniors. Priorities: the Ryan White
Care Act, which provides health care and medication for children
suffering from AIDS remains to be reauthorized. Priorities: the
Patient's Bill of Rights, which is supported by an overwhelming
majority of Americans, still sits in conference.
The multimillionaires can take care of themselves. Let us pass
legislation that really helps the working families, not helping the
rich get richer under the House leadership.
Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Gary Miller).
(Mr. GARY MILLER of California asked and was given permission to
revise and extend his remarks.)
Mr. GARY MILLER of California. Mr. Speaker, it is amazing, the people
that talk about how can we risk this much money on a risky tax scheme.
Let me read a letter from somebody who has been impacted by this death
tax, and then my colleagues can come back and say it is a risky tax
scheme.
``Today marks the first day of the ninth month since my dad passed
away. He was a physician specializing in chemotherapy treatments for
cancer patients. He grew up in a very poor family in Brooklyn, New York
and he still managed to put himself through school and become a doctor,
without any help from government, I might add. His plan was to retire
this summer, after doing so much good for his patients and our
community, and spend the time sailing on his 15-year-old, 27-foot
sailboat that he bought 2 weeks before he died. He paid untold sums of
money in taxes throughout his lifetime while working to the age of 65,
a requirement necessary to save enough money to retire at a financial
level that a physician deserves. While paying 50 percent of his income
in taxes to the government, money that might otherwise have been used
to fund an early retirement, he died.
``I am his son and executor of the estate that he worked so hard
saving for and did not get to enjoy. Today, I am going to have the
pleasure of writing 2 checks totaling nearly $1 million divided between
the State and Federal Government. This is the most revolting and
disgusting thing that I have ever had to do. When the CPA told me how
much money the death penalty imposes on my dad's estate, I literally
almost threw up. As a result of my dad's strong desire to save for his
retirement, the majority of his estate is in Individual Retirement
Accounts, and you know the tax consequences that creates when
distributed to heirs, right? After all is said and done, the government
will have taken over 50 percent of my dad's property and money.
``I adamantly believe that the government's only societal role is to
protect the rights, lives and property of law abiding citizens. Period.
All socialized legislation beyond that is an unnecessary intrusion into
my life and a waste of my money.
``The government already confiscates too much money through taxation
by means of income tax, property tax, capital gains tax, gasoline tax,
Social Security tax, Medicare tax, telephone tax, hotel tax, airline
ticket tax, energy tax, entertainment tax and numerous other hidden
excise taxes that I continuously pay.
Upland, CA, March 6, 2000.
Representative Gary Miller,
Diamond Bar, CA.
Dear Representative Miller, Today marks the 1st day of the
9th month since my dad passed away. He was a physician
specializing in chemotherapy treatments for cancer patients.
He grew up in a very poor family in Brooklyn New York, and he
still managed to put himself through school and become a
doctor, without the help of the government I might add. His
plan was to retire this summer, after doing so much good for
his patients and our community, and spend time sailing the 15
year old 27 foot sailboat he bought two weeks before he died.
He paid untold sums of money in taxes throughout his lifetime
while working to the age of 65, a requirement necessary to
save enough money to retire at a financial level that a
physician deserves. While paying 50% of his income in taxes
to the government, money that might otherwise have been used
to fund an early retirement, he died.
I am his son and executor of the estate that he worked so
hard saving for and didn't get to enjoy. Today I am going to
have the pleasure of writing two checks totaling nearly one
million dollars between the state and federal government.
This is the most revolting and disgusting thing that I have
ever had to do. When the CPA told me how much money the death
penalty imposed on my dad's estate, I literally almost threw
up. I was sick to my stomach. As a result of my dad's strong
desire to save for his retirement the majority of his estate
is in Individual Retirement Accounts and you know the tax
consequences that creates when distributed to heirs, right?
After all is said and done, the government will have taken
over 50% of my dad's property and money.
I adamantly believe that the government's only societal
role is to protect the rights, lives, and property of the law
abiding. Period. All socialized legislation beyond that is an
unnecessary intrusion into my life and a waste of my money.
The government already confiscates too much money through
taxation by means of Income tax, Property tax, Capital Gains
tax, Gasoline tax, Social Security tax, Medicare tax,
Telephone tax, Hotel tax, Airline Ticket tax, Energy tax,
Entertainment tax and numerous other hidden Excise taxes that
I continuously pay.
Having stated that, and inasmuch as you are supposed to be
representing me, can you write me back with even one good
reason that validates the usurpation of one million dollars
that was left by my dad, to my family?
Sincerely,
Todd M. Kolbert.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from Texas
(Mr. Rodriguez).
Mr. RODRIGUEZ. Mr. Speaker, how irresponsible have we become? How
greedy have we become? We all pay taxes; we all have a responsibility
to pay down the debt. This is irresponsible, and it is a callous
disregard for all Americans, when we only favor the top 2 percent of
the richest.
Let us cut the taxes on all Americans, not just on the richest 2
percent of this country. The top 1 percent own 40 percent of the
assets. This piece of legislation would even cause the divide to even
be more between the haves and the have-nots. This is un-American, it is
unfair, it is unethical and irresponsible. It is heartless, to think
that we are going to be giving $50 million to the top 2 percent richest
when, at the same time, we have said no to our veterans. This same
Congress has said no to our veterans. When we have promised them access
to health care, we
[[Page H4157]]
have said no. We have been unwilling to give them that $5 billion that
they need; yet we say yes to the 2 percent of the richest of this
country when we say that we are going to give them $50 billion.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Illinois (Mr. Ewing).
Mr. EWING. Mr. Speaker, I thank the chairman for yielding me this
time. I rise in support of H.R. 8, the Death Tax Elimination Act.
This is one of the worst taxes we have in America. America is
renowned as the place where through hard work and sacrifice an
individual can make a better life for himself and his family. We have
an entrepreneurial spirit that is unmatched in any other country, and
it is because of the ability to make it here in this country.
What is the trouble with the Federal estate tax? It does away with
that. It kills small businesses; it kills the family farm. I say to my
colleagues, my constituents who are not wealthy want that ability, and
most Americans do. I say we should pass this bill, we should vote
against the substitute, and we should eliminate the death tax in
America.
Mr. Speaker, I rise today in support of H.R. 8, the Death Tax
Elimination Act of 2000. The death tax is one of the most onerous taxes
levied upon our citizens and is in complete contrast to the principles
upon which this country was based. America is renowned as a place where
through hard work and sacrifice, an individual can make a better life
for himself and his family. We have an entrepreneurial spirit that is
unmatched in any other country and we need to ensure that spirit
remains.
That is what is so troubling about the Federal estate tax. It does
not encourage hard work and entrepreneurship, but rather discourages
it. The only message that the estate tax sends is that if you are hard
working and industrious we will not reward you, we will punish you.
This clearly is not the message we need to be sending.
Currently, small businesses and farms are being hit the hardest by
this unfair burden. Heirs sometimes are forced to liquidate businesses
just to pay estate taxes. Allow me to provide you with a personal
example of the negative effects of this tax.
In my district there is a business called Niemann Foods which runs a
small chain of grocery stores. This company was founded in 1917, by
Ferd and Steve Neumann. By 1969 Niemann Foods was a thriving business
consisting of two components: grocery stores and a wholesale
distribution operation. But then something tragic happened. Ferd passed
away unexpectedly. Suddenly the Niemann family was faced with an estate
tax bill of several hundred thousand dollars. What could they do? Most
of their assets were not liquid, they were tied up in the day-to-day
operations and not readily available. The only option available to the
family was to liquidate part of the business to pay their tax burden.
As a result the wholesale portion of Niemann Foods was sold off and the
proceeds given to the IRS, instead of being used to expand the
business. The Neimann family now spends countless hours and dollars on
estate planning trying desperately to avoid a repeat of this
distasteful situation. This is time and money that could and should be
put into expanding the business and creating more jobs, rather than
being spent trying to guard against losing the business because of a
bad tax. The sad and unfortunate reality is that everyone in this
Chamber probably has a similar story that they can tell. We should
encourage productivity and growth, not stifle it with unfair burdens.
This tax is contrary to American ideals and should be repealed.
I have one problem with this bill, it takes too long to accomplish
what should be done immediately. If this tax is wrong, it is wrong and
we shouldn't take 10 years to rectify the situation. We speak of
fairness, but is it fair for people dying today to have a larger tax
burden than those who die a year or even ten years from now? I can see
it now hospitals will be filled with individuals on life support for
years waiting for this bad tax to be lifted. Let's pull the plug on
this tax now.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the gentleman from North
Dakota (Mr. Pomeroy).
Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding me this
time. I oppose H.R. 8 and strongly support the Rangel substitute.
Proponents have said this about helping farmers pass the farm from one
generation to the other. If that is the issue, then pass the Rangel
substitute.
The U.S. Department of Agriculture says 99 percent of the farms in
this country have a net worth below $3 million. The Rangel substitute
takes a farm couple and allows them to pass a farm worth $4 million of
net worth. We take care of more than 99 percent of the farms in this
country under the Rangel substitute.
Similarly, small businesses, up to $4 million. Another way the
substitute is better than the majority bill is that it takes effect and
it takes effect next year. No 10-year wait for the relief they are
talking about. Next year.
Another thing about the Rangel substitute, the President will sign
it. There is a veto threat on their bill. It will never become law. Let
us provide the relief and make it real, not just issue press releases
about another House debate. Vote the Rangel substitute for meaningful
relief for family farmers.
Mr. Speaker, I rise in opposition to H.R. 8 and in strong support of
the Rangel substitute. Unlike the underlying bill, the Rangel
substitute provides immediate estate tax relief for family farmers and
small businesses, does not drain resources from other urgent
priorities, and, most importantly, it could be enacted into law this
year.
First, the Rangel substitute eliminates estate taxes for more than 99
percent of family farms not in 10 years, as under H.R. 8, but
immediately. The Rangel substitute allows family farms an estate tax
exclusion of $4 million, which exceeds the net worth of more than 99
percent of family farms according to USDA. For all but a handful of the
largest farms in the country, the Rangel substitute provides greater
estate tax relief than the underlying bill.
Because it is targeted, the Rangel substitute can offer more tax
relief for farms and small business without draining resources from
other urgent priorities, including tax cuts for working families. By
contrast, H.R. 8 would ultimately result in a revenue loss of $50
billion annually, or $500 billion over the second 10-year period. For
the cost of repealing the estate tax altogether, Congress could enact
tax cuts to reduce the cost of child care, open the doors to higher
education, increase the affordability of long-term care, and still have
$35 billion left over either to reduce the debt, provide a prescription
drug benefit, strengthen our national defense or address a similarly
urgent priority.
Finally, the Rangel substitute is the only estate tax relief measure
on the floor today that can actually be enacted this year. The
administration supports estate tax relief for small business and family
farms but has stated unequivocally that the President would veto H.R.
8. As estate tax bill that will never be signed is of no value to the
farmers I represent.
For these reasons, I urge my colleagues to support the Rangel
substitute and to oppose H.R. 8.
Mr. ARCHER. Mr. Speaker, I yield myself 2\1/2\ minutes.
Mr. Speaker, let me speak specifically on this substitute. First, at
the margin, it is better than the current law. That is a great
breakthrough to see the minority that was proposing increases in the
death tax before 1995, to have at least come to where they marginally
want to reduce the impact of the death tax.
But in many, many ways, it does not tell us up front what is really a
part of the proposal.
{time} 1215
It is very much like Peanuts where Lucy tells Charlie Brown, ``Come
kick the football,'' and right before he gets there, she pulls the
football away.
And so what they do here is they say we are going to reduce rates;
and at the same time if you look at page 2, they raise rates, because
they take away the credit, as the gentlewoman from Washington (Ms.
Dunn) said, on the State inheritance taxes. So they raise those rates.
At the same time they deny all of the small businesses, farms, the
benefit of what they say they are giving them. The gentleman from
Louisiana (Mr. McCrery) spoke to that. They say only 3 percent of the
small businesses and farms are taxed today. Let me also say that only 3
percent of that 3 percent will get any benefit from their proposal.
That is sad but true as the gentleman from Louisiana said earlier.
And then they go on, and they increase the market value of minority-
held interests in nonpublicly traded entities. The courts have ruled
against this over and over again and say the tax should be applied only
to what is the true market value at the time of death. They create an
arbitrary market value that has nothing to do with the true market
value for those minority-held interests in nonpublicly traded entities.
So they give a little bit on one hand, and they take back big chunks on
the other hand.
They also mask the 18 percent lowest marginal tax rate for the death
tax. No
[[Page H4158]]
one will pay the 18 percent. They will start out at 38 percent. It is
in the Code. It says the first dollar is 18 percent, but not so. And so
they give a little, and they take back a lot.
Vote against the Rangel substitute.
Mr. RANGEL. Mr. Speaker, I yield myself 2\1/2\ minutes.
I would like to respond briefly to the chairman of the committee
because not too long ago a distinguished Member from the other side who
serves on the committee commented that the Rangel substitute was no
more than what he and Republicans had suggested several years ago and
that he thought it was a good idea at the time; but he had no idea that
President Clinton with a Democratic Congress would be able to have a
budget to allow us to get the surplus that we are enjoying today, but
now that he sees the surplus, then he would say, Let's go for the whole
thing.
That is the problem that we have today. You people are not interested
in passing laws to take care of the small farmer and small businesses.
What you are interested in is politically a veto. If indeed you were
concerned about helping the small family farmer and the small
businesses, what you would do is say, well, listen, since we can agree
with the President, let us get this signed into law, and then maybe if
God is willing, you will be in the majority and you can take care of
it.
You have been in the majority 6 years, and you have not done a darn
thing except push for vetoes. Veto, veto, veto. Every time we reach
agreement with you, you kick it up another notch and make it impossible
for the President to be responsible and deal with this. This will cost
$104 billion over 10 years, and then we have got to hemorrhage $50
billion each year. We have been able to take care of the problem that
you have been crying and bawling about for a long time, and we agree
that it is an inequity. Why can we not come together where we agree,
get the President to sign something, and then for God sake get together
and try to resolve some of the other problems, whether it is the
marriage penalty, whether it is the Patients' Bill of Rights, whether
it is the minimum wage.
You agree with us, but you always kick it up a notch to be
irresponsible so that the President cannot sign it into law. There is
still an opportunity. If you vote for the substitute, let the President
sign it and take credit for it. The only difference between the bills
that you have had and the bill that we have got is that we have decided
to be responsible, we decided not to gut the budget, we decided to
protect Social Security and Medicare and still take care of those
people who inherit the businesses and the farms from their parents and
their grandparents who worked hard each and every day to provide and
leave this for them.
And so I am suggesting, vote for the substitute and then maybe next
year we can go further.
Mr. Speaker, I yield the balance of my time to the gentleman from
Michigan (Mr. Bonior), the minority whip.
The SPEAKER pro tempore (Mr. Kolbe). The gentleman from Michigan is
recognized for 3 minutes.
Mr. BONIOR. Mr. Speaker, I want to commend my colleague for his
statement.
The other day I was talking, and I noticed that the Republican
leaders had gathered around this coffin outside the Capitol building.
Like anyone, I wondered, what is going on out there? I later learned
that they were promoting their estate tax scheme. It was then that I
realized what I had seen was a funeral. It was the death of
credibility.
What else can you call a scheme that costs some $50 billion a year
but fails to provide added relief for small businesses and family farms
until the year 2010? You can call it a lot of things, but one thing you
cannot call it is a credible tax relief package. Oh, sure, some people
stand to gain from this. If you happen to be one of the richest people
in the world, this plan could cut your family's taxes by literally tens
of billions of dollars. But for 98 percent of Americans, this bill will
not even provide one dollar's worth of relief.
It will do something, though. Oh, it will do something. It will
squander $50 billion a year just at a time when we need it the most.
That means undermining our ability to guarantee the solvency of
Medicare and Social Security. It means harming our chances of paying
down the debt. And it will work to prevent us from investing in better
schools, in child care, in a clean environment, in fighting crime, in
taking care of our veterans.
We Democrats have an alternative, a responsible plan that provides an
estate tax break that we can bank on without breaking the bank. Our
plan immediately provides a $4 million per-family exclusion for farms
and small businesses. In fact, it immediately exempts 99 percent of
family farms from estate taxes. It reduces by almost half the number of
estates subject to the estate tax.
So what we have here, Mr. Speaker, is a choice between credible
estate tax relief or tax cuts for the incredibly rich. If you believe
in standing up and working for working families, the choice in this
debate is clear.
I urge Members to vote no on the Republican scheme and to support the
Democratic alternative.
Mr. ARCHER. Mr. Speaker, I yield the balance of my time to the
gentleman from Illinois (Mr. Hastert), the respected Speaker of the
House of Representatives.
Mr. HASTERT. I thank the gentleman for yielding me this time.
Mr. Speaker, I have a great deal of respect for the minority whip who
just spoke, but I think he made a mistake when he walked by that
funeral display. The funeral is the death of and putting away the death
tax.
When we talk about credibility, we can talk about a lot of things.
When I first came here, we had a deficit of a huge number, $450
billion. We had a debt of $5.5 trillion. We started turning that
around. Just in the last couple of years, we have said, none of our
dollars in Social Security are going to go into the general fund. We
are going to set that aside for Social Security. We are going to do a
better job of education. We have seen a steady increase in dollars for
education. We are going to help our young men and women in defense so
that they do not have to be on food stamps to feed their family. We do
have a surplus. We are talking about a big surplus in the next couple
of years. We have two things that we can do: we can pay down the debt
with that surplus, or we can give some of that money back to the people
who made it in the first place.
As of September of this year, we will have paid back $350 billion on
the public debt. That is a first good step. We have not done it all by
ourselves. We have done it with help from our friends on the other side
of the aisle. I do not say it is all partisan one side or the other
because we have to work on a bipartisan basis. But the other question
is, what do we do? The gentleman from the other side of the aisle said,
We're going to take $50 billion. We can't afford it. And where does
that money come from? The Federal Government reaches in and takes it
away from people who have paid taxes all their life, that have built a
small business or a family farm. When they die and they want to pass it
on to their children and their grandchildren, the Federal Government
comes in and takes it away, 52 percent to 55 percent of that entity; it
takes it away.
Let me tell you a story. When I was a young man, my father-in-law
died. He was a farmer in southern Illinois. I thought maybe I would
like to be a farmer. But by the time that we got the death tax taken
care of and at that time Illinois had a death tax, too, every tractor,
every combine, every extra roll of fence, every head of cattle was sold
off so we could pay the State estate tax and the Federal death tax. I
might have been a good farmer. But I did not have that choice.
I ran for the legislature in 1980. The gentleman from Illinois (Mr.
Ewing) and I helped take the death tax off in the State. We helped
relieve that a little bit. I have always given him a great deal of
credit for doing that. I was giving a speech not so long ago in
Wichita, Kansas. It was a small dinner group of probably 50 people.
Halfway through my speech, there was an older gentleman who stood up
and said, Wait a minute, young man. He got my attention. He called me
young man. He was probably 85 years old. He said, I have a small
business just west of town. I write 96 pay checks a week. Something is
going to happen to me someday. I want to pass that business on to my
children and my grandchildren. The
[[Page H4159]]
Federal Government is going to come in and take 52 percent of that
business. When they do, we are going to have to sell every truck, every
piece of equipment. I cannot pass that business on as an entire entity
from generation to generation. There are 96 families in this town that
will not have a job anymore.
We talk about big entities, multinational businesses and big
corporations. Do you know what happens when you have to sell the family
farm? Do you know what happens when you have to sell that small
business? You sell it to the big guys, because you get the cash out of
it and pay the Government. And so when you deprive families from
passing that entity, that business, that farm, that ranch from one
generation to the other, you say, we are going to give this to the big
guys. We are subsidizing the big guys. We are pushing the bigger and
bigger entities in this country. We are taking away from the families.
I say this is a vote for the families of this country, of the United
States of America. Defeat the substitute, vote for the proposal, and
let us get on with it.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in opposition to H.R.
8, the Death Tax Elimination Act of 2000 and strongly support the
Democratic Alternative.
I think we are in agreement on both sides of the aisle that the
estate, gift, and generation-skipping transfer taxes are unduly
burdensome on all taxpayers and that changes must be made. However,
H.R. 8 is not in the best interest of our Nation, particularly in terms
of relief to small businesses and small farms.
Although, H.R. 8 attempts to alleviate the heavy burden of the estate
tax, it lacks a feasible solution to alleviate these tax burdens faced
by many small businesses and small farms. Many small business owners
and farm owners have told me compelling stories regarding their plight
and they want to ensure that in the foreseeable future that they will
be able to pass on their farms and small businesses to their loved
ones.
The Democratic Alternative will provide immediate tax relief to these
same small businesses and farm owners. Specifically, this alternative
will raise the special exclusion to $4 million for a couple owning a
farm or small business. For instance, a small business owner in my
district can pass on their business intact with no estate tax
whatsoever if it worth up to $4 million.
In addition, because H.R. 8 is phased in over ten years, a couple
passing on their farm or small business in the near future would avoid
more tax under the Democratic plan than under this bill with calls for
a full repeal. See--More people than ever before are becoming
millionaires by working hard and investing wisely. By increasing the
general exclusion (now at $675,000) to $1.1 million next year, the
Democratic Alternative will allow for any person to pass on their
wealth to their loved ones without the burden of an estate tax.
In fact, unlike the Republican's full repeal, nobody has to worry
about living long enough for the bill to be fully phased in. The
Democratic $1.1 million exclusion is effective immediately in 2001.
Also, the Democratic alternative will lower estate tax rates by 20%
across the board (i.e. the 55% rate would be 44%, the 37% would be
29.6%). As a result, I fully support this fiscally responsible estate
tax relief unlike Republican leaders who insist on a full estate tax
repeal before any plan is in place to save Social Security and
Medicare, or provide a prescription drug benefit for our Nation's
seniors, or pay down our national debt.
``H.R. 8 will relinquish nearly $50 billion a year in revenue with no
guarantee that this revenue loss will not harm current plans to save
Social Security and Medicare in future years. While the official
estimates show H.R. 8 costing $28.2 billion over 5 years and $104.5
billion over 10 years, the true cost is cleverly hidden by phasing in
the repeal so that the real drain on revenue does not show up until
after the 10-year budget window.''
By enacting this full repeal, the very richest in our society will be
able to pass their immense fortunes to their heirs without a penny of
tax. Hence, our Nation's children will share in our burden of saving
Social Security and Medicare and paying off our massive national debt.
Hence, the real winners of this repeal legislation are not small farms
and small businesses but are very wealthy families with immense assets.
Finally, President Clinton has already pledged to veto H.R. 8,
because it provides such an unfair relief to the very richest in our
society, before saving Social Security and Medicare and paying down the
debt. The Democratic Alternative would provide fiscally responsible
estate tax relief that the President would sign. However, Republican
leaders appear not to care that their repeal bill will not become law!
See--the real choice is not between the Democratic Alternative and H.R.
8, but between a negotiated bipartisan compromise or no estate tax
relief at all for all of America. I choose relief for all America!
In closing, I again urge my colleagues to oppose H.R. 8, and instead
adopt the democratic alternative.
Mr. COYNE. Mr. Speaker, I rise today in opposition to H.R. 8, The
Estate Tax Elimination Act. This bill would do nothing to help the
average family businesses. Only 2% of estates are now subject to the
estate tax. Hard-working Americans should be able to pass their
businesses on from generation to generation. However, a full repeal of
the estate tax is not necessary to preserve family businesses.
The Democratic alternative offers immediate, fiscally responsible
relief targeted to small business owners and family farmers. It would
exempt up to $4 million per family in assets from the tax and cut
estate tax rates by 20 percent. The Democratic alternative would cost
only 20 billion over the next 10 years.
H.R. 8 would cost $105 billion over the next ten years. From 2011 to
2020, the proposal would cost $620 billion. The full costs of this bill
would come just when the retiring baby boomers will begin to require
more services. This is money we could use to strengthen Social Security
and offer a prescription drug benefit for Medicare.
Full repeal also reduces the progressivity of the tax code. The
wealthiest Americans would pay tens of billions of dollars less in tax.
This bill would cause the gap between low-income people and the wealthy
to grow even faster. I urge my colleagues to support Mr. Rangel's
fiscally responsible proposal for estate tax relief targeted to
immediately help small businesses.
Mr. KLECZKA. Mr. Speaker, I rise today in support of the Democratic
alternative which does three important things to ease the estate tax
burden on individuals and family businesses.
First of all, the substitute would nearly double, effective
immediately, the estate and gift taxes exemption for individuals to
$1,100,000, from the current level of $675,000. This means a husband
and wife can exempt $2.2 million of their assets from estate taxes.
Secondly, the Democratic proposal significantly raises the estate tax
exclusion for small businesses. Under current law, there is a $1.3
million exclusion from the estate tax for interests in farms and
closely held businesses. The Democratic substitute would effectively
create a $4 million exclusion per family for farms and closely held
businesses. It would accomplish this by increasing the limit on the
small business exclusion from $1.3 to $2 million and by providing that
the portion of the exclusion not used in the estate of the first spouse
to die will be allowed to the estate of the other spouse.
Finally, the substitute would provide a 20 percent across-the-board
reduction to the estate and gift tax rates.
I support the Democratic substitute because it provides needed estate
tax relief to small business and individuals without breaking the bank.
My Republican colleagues have offered a plan to totally eliminate the
estate tax, that when fully phased in, will cost $50 billion a year.
Mr. Speaker, we cannot afford to sacrifice our chance to pay down the
national debt, ensure the long-term solvency of Social Security, and
modernize the Medicare program by passing the Republican bill which
will benefit only 2% of the population--those with the wealthiest
estates.
I urge my colleagues to support the Democratic proposal, a common-
sense and affordable way to give Americans estate tax relief and still
provide funds to meet our responsibility to reduce the national debt so
this burden will not continue to be placed on the shoulders of our
children and grandchildren.
The SPEAKER pro tempore. Pursuant to House Resolution 519, the
previous question is ordered on the bill and on the amendment offered
by the gentleman from New York (Mr. Rangel).
The question is on the amendment in the nature of a substitute
offered by the gentleman from New York (Mr. Rangel).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. RANGEL. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 196,
nays 222, not voting 17, as follows:
[[Page H4160]]
[Roll No. 252]
YEAS--196
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett (WI)
Becerra
Bentsen
Berman
Berry
Bishop
Blagojevich
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson
Clayton
Clement
Clyburn
Condit
Costello
Coyne
Cramer
Crowley
Cummings
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gejdenson
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Hooley
Hoyer
Inslee
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kleczka
Kucinich
LaFalce
Lampson
Lantos
Larson
Leach
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (CT)
Maloney (NY)
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (VA)
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Phelps
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Serrano
Sherman
Sherwood
Shows
Sisisky
Skelton
Slaughter
Snyder
Spratt
Stabenow
Stark
Stenholm
Strickland
Stupak
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Waxman
Weiner
Wexler
Weygand
Wise
Woolsey
Wu
Wynn
NAYS--222
Abercrombie
Aderholt
Archer
Armey
Bachus
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Berkley
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Coble
Coburn
Collins
Combest
Cook
Cooksey
Cox
Crane
Cubin
Davis (VA)
Deal
DeLay
DeMint
Deutsch
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ewing
Fletcher
Foley
Forbes
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (WI)
Greenwood
Hansen
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Jenkins
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
King (NY)
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCollum
McCrery
McHugh
McInnis
McIntosh
McKeon
Metcalf
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Morella
Murtha
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Paul
Pease
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanford
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Shimkus
Shuster
Simpson
Skeen
Smith (NJ)
Smith (TX)
Souder
Spence
Stearns
Stump
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOT VOTING--17
Blumenauer
Clay
Conyers
Cunningham
Danner
Gillmor
Gilman
Istook
Kind (WI)
Klink
Lazio
Markey
McDermott
Smith (MI)
Smith (WA)
Vento
Watt (NC)
{time} 1248
Mrs. BIGGERT and Messrs. WOLF, DICKEY and DUNCAN changed their vote
from ``yea'' to ``nay.''
Ms. BROWN of Florida changed her vote from ``nay'' to ``yea.''
So amendment in the nature of a substitute was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. Kolbe). The question is on engrossment
and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mr. Doggett
Mr. DOGGETT. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. DOGGETT. Mr. Speaker, I am.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Doggett moves to recommit the bill H.R. 8 to the
Committee on Ways and Means with instructions to report the
same back to the House forthwith with the following
amendment:
At the end of the bill (page 35, after line 5), add the
following new title:
TITLE VI--DENIAL OF GIFT TAX EXCLUSION IF POLITICAL ORGANIZATIONS FAIL
TO MEET REPORTING AND DISCLOSURE REQUIREMENTS
SEC. 601. DENIAL OF GIFT TAX EXCLUSION IF POLITICAL
ORGANIZATIONS FAIL TO MEET REPORTING AND
DISCLOSURE REQUIREMENTS.
(a) Denial of Gift Tax Exclusion.--Paragraph (5) of section
2501(a) (relating to transfers to political organizations) is
amended to read as follows:
``(5) Transfers to political organizations.--Paragraph (1)
shall not apply to the transfer of money or other property to
a political organization (within the meaning of section
527(e)(1)) for the use of such organization only if such
organization is in substantial compliance with subsections
(d) and (e).''
(b) Increased Reporting by Political Organizations.--
Section 2501 is amended by redesignating subsection (d) as
subsection (e) and by inserting after subsection (c) the
following new subsection:
``(d) Returns by Political Organizations.--
``(1) Statement of organization.--
``(A) In general.--Every political organization shall file
a statement of organization with the Secretary (in such form
and manner as the Secretary shall prescribe) which contains
the information described in subparagraph (B). Such statement
shall be filed not later than 10 days after the date that
such organization is established (or, in the case of an
organization in existence on the date of the enactment of
this section, not later than 10 days after such date of
enactment).
``(B) Statement of organization.--The information described
in this subparagraph is--
``(i) the name and address of the political organization,
``(ii) the name, address, relationship, and type of any
person which is directly or indirectly related to or
affiliated with such political organization,
``(iii) the name, address, and position of the custodian of
books and accounts of the political organization,
``(iv) the name and address of the treasurer of the
political organization, and
``(v) a listing of all banks, safety deposit boxes, and
other depositories used by the political organization.
``(C) Changes in information.--If there is a change in
circumstances such that the most recent statement filed under
this paragraph is no longer accurate, the political
organization shall file a corrected statement with the
Secretary (in such manner as the Secretary shall prescribe)
not later than 10 days after the date that the statement
first ceased to be accurate.
``(D) Related and affiliated persons.--For purposes of
subparagraph (B)(ii), a person is directly or indirectly
related to or affiliated with a political organization if
such person, at any time during the 3-year period ending on
the date such statement is submitted to the Secretary--
``(i) was in a position to exercise substantial direct or
indirect influence over the process of collecting or
disbursing the exempt purpose funds of such organization, or
``(ii) was in a position to exercise substantial, overall
direct or indirect influence over the activities of such
organization.
``(2) Statements of contributions and disbursements.--
``(A) In general.--Every political organization shall file
a statement with the Secretary (at such time and in such form
and manner as the Secretary shall prescribe) which contains
the information described in subparagraph (B) with respect to
each reporting period.
[[Page H4161]]
``(B) Information described.--The information described in
this subparagraph is--
``(i) the name and address of each person to whom the
political organization made any disbursement during the
reporting period in an aggregate amount or value in excess of
$200 within the calendar year,
``(ii) a certification, under penalty of perjury, whether
such disbursement is made in cooperation, consultation, or
concert, with, or at the request or suggestion of, any
candidate for public office or any authorized committee of
such candidate or agent of such committee or candidate,
``(iii) the name, address, and occupation of each person
(and the name of his or her employer) who made (in the
aggregate for the reporting period) a contribution in excess
of $200 to the political organization,
``(iv) the name, address, and business purpose of any
entity, as well as whether the entity purports to be exempt
from tax under this title and (if so) the provision under
which the entity purports to be so exempt, which made (in the
aggregate for the reporting period) a contribution in excess
of $200 to the political organization, and
``(v) the original source and the intended ultimate
recipient of all contributions made by a person, either
directly or indirectly, on behalf of any particular person,
including contributions which are in any way earmarked or
otherwise directed through any intermediary.
``(C) Reporting periods and due dates for filing
statements.--
``(i) In general.--The reporting periods and deadlines for
filing statements required by this subsection shall be the
same as the periods and deadlines set forth for reports under
paragraph (4) of section 304(a) of Federal Election Campaign
Act of 1971 (2 U.S.C. 434(a)). The Secretary shall issue such
guidance as may be necessary concerning the filing deadlines
for such statements.
``(ii) Certain organizations file annually.--In the case of
a political organization described in clause (iii)--
``(I) subparagraph (A) shall not apply,
``(II) the reporting period shall be such organization's
taxable year, and
``(III) the due date for the statement required by this
subsection shall be the due date (without regard to
extensions) for filing the return of tax for such year,
whether or not such organization is required to file a return
for such taxable year.
``(iii) Organization described.--An organization is
described in this clause if such organization is a political
organization which is organized and operated exclusively for
the purpose of securing the nomination, election, or
appointment of a clearly identified candidate for State,
local, or judicial office.
``(D) Electronic filing.--The Secretary shall develop
procedures for submission in electronic form of statements
required to be filed under this paragraph.
``(3) Political organization.--For purposes of this
section, the term `political organization' has the meaning
given to such term by section 527(e) without regard to
whether such organization claims a tax exemption under
section 527.
``(4) Paperwork and burden reduction.--An organization
shall not be required to file any statement under paragraph
(1) or (2) for any period if, with respect to such period,
such organization submits to the Secretary, under penalty of
perjury, a certified statement that the organization has made
a filing, which is publicly available, with another Federal
agency which includes all of the information requested by
paragraph (1) or (2), whichever is applicable, and which
specifies the public location where such information may be
found.''
(c) Increased Disclosure by Political Organizations.--
Section 2501, as amended by subsection (b), is further
amended by redesignating subsection (e) as subsection (f) and
by inserting after subsection (d) the following new
subsection:
``(e) Inspection of Statements of Political
Organizations.--
``(1) In general.--In the case of a political organization
(as defined in subsection (d)(3))--
``(A) a copy of the statements filed under subsection (d)
shall be made available by such organization for inspection
during regular business hours by any individual at the
principal office of such organization and, if such
organization regularly maintains 1 or more regional or
district offices having 3 or more employees, at each such
regional or district office, and
``(B) upon request of an individual made at such principal
office or such a regional or district office, a copy of such
statements shall be provided to such individual without
charge other than a reasonable fee for any reproduction and
mailing costs.
The request described in subparagraph (B) must be made in
person or in writing. If such request is made in person, such
copy shall be provided immediately and, if made in writing,
shall be provided within 30 days.
``(2) 3-year limitation on inspection of statements.--
Paragraph (1) shall apply to any statement filed under
subsection (d) only during the 3-year period beginning on the
last day prescribed for filing such statement (determined
with regard to any extension of time for filing).
``(3) Limitaion on providing copies.--A rule similar to the
rule of section 6104(d)(4) shall apply for purposes of this
subsection.''
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
Mr. DOGGETT (during the reading). Mr. Speaker, I ask unanimous
consent that the motion to recommit be considered as read and printed
in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
The SPEAKER pro tempore. The gentleman from Texas is recognized for 5
minutes in support of his motion to recommit.
Mr. DOGGETT. Mr. Speaker, I yield 1 minute to the gentleman from
Kansas (Mr. Moore), a leader in this political reform effort.
Mr. MOORE. Mr. Speaker, I urge my colleagues to support the motion to
recommit. The majority whip said, ``I am for full disclosure and
immediate disclosure.'' What we say is not nearly as important as how
we vote.
This motion only requires organizations engaging in political
activity to name the contributors, how much was contributed, and how
the money was spent. Disclosure, simple disclosure.
The American people are fed up with hypocrisy and delays. What we
need now is action. Last night, John McCain stood up in the United
States Senate and stood up for the American people on behalf of
disclosure. I urge all of my colleagues on this body on both sides of
the aisle to stand up for disclosure. The American people deserve,
expect, and demand it.
Mr. DOGGETT. Mr. Speaker, I yield 30 seconds to the gentleman from
Texas (Mr. Stenholm), another leader in this effort.
(Mr. STENHOLM asked and was given permission to revise and extend his
remarks.)
Mr. STENHOLM. Mr. Speaker, the issue is pretty simple today. It is
whether we are going to have sunshine in the political process or
whether we are not. We all know we do not need another study. We do not
have to wait on another study. All we need to know is whether or not
the 527 and all other groups shall disclose how much they are spending,
how they are spending it, and who is, in fact, contributing the money.
Let us let sunshine shine on the legislative process. It is pretty
simple. Vote for the motion to recommit. Let us move this process
along.
Mr. DOGGETT. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Iowa (Mr. Ganske).
Mr. GANSKE. Mr. Speaker, yesterday the Senate said that stealth
political committees have to disclose their donors and expenditures.
These tax exempt 527s and other like groups could be the Communist
Chinese, Colombian drug lords, the Mafia. Who knows?
Both Republicans and Democrats say they want full disclosure. Last
year, the majority whip said in support of the Doolittle full
disclosure bill, quote: What reform can restore accountability more
than an open book? Letters from the gentleman from California (Mr.
Doolittle) shout, ``Full Disclosure,'' ``Scrap the Failed Rules'' and
``Full Disclosure.'' Another Dear Colleague screams, ``Hypocrisy.''
What will the headlines scream tomorrow? Mr. Speaker, 115 Republicans
voted last year for full disclosure only. If my colleagues are really
for full disclosure, vote yes. A ``no'' vote is going to be mighty hard
to explain in November. We can get this done today. Vote yes.
Mr. DOGGETT. Mr. Speaker, how much time remains?
The SPEAKER pro tempore. The gentleman has 2\1/2\ minutes remaining.
Mr. DOGGETT. Mr. Speaker, I yield 30 seconds to the gentleman from
Massachusetts (Mr. Meehan), the leader of the campaign reform effort
here.
Mr. MEEHAN. Mr. Speaker, yesterday the United States Senate took a
small but important step towards restoring some accountability to our
elections system. We have a chance today to match that step with one of
our own.
We cannot afford to wait. The election season is already upon us.
There are millions and millions of dollars being raised and the public
has no idea where it is coming from. We have to stop this corrupt
system of raising money and having no one know where it comes from. The
opportunity is now. Now is when we need to change this system.
Let us match step with the other body and send a message across
America that whoever contributes to campaigns in America in this cycle,
the American people are going to know where that money came from.
[[Page H4162]]
Mr. DOGGETT. Mr. Speaker, I yield myself 1 minute and 30 seconds.
Mr. Speaker, last night, across this Capitol, 14 Republicans stood up
to their leadership and took a firm stance against the corruption of
our American political system. This motion once again seeks to achieve
what now they have really already accomplished.
Mandatory full disclosure by every secret political organization is
the one modest reform that we can put in place in time for this year's
election. Like yesterday's successful McCain-Feingold amendment, this
gift tax motion presents each of us with a moment of truth, a choice
for more secrecy or more democracy.
Six Republicans joined 202 sponsors of this measure to choose
openness and reform on my previous motion to recommit in May. We need
only a few more to make reform a reality.
This motion, effective immediately, will not delay by 5 minutes the
estate tax repeal. This motion specifically applies to all
organizations engaging in political activity. It does not exclude,
contrary to what my colleagues have been told, or offer any special
treatment, for labor unions or trial lawyers or any other group allied
with Democrats. This motion seeks no organization's constitutionally
protected membership list.
Mr. Speaker, this motion parallels language that I offered and had
rejected in the Committee on Ways and Means almost 3 months ago. The
last-minute offer this morning of a vote by July 4 on a new bill, not
yet filed, is just another way of running out the clock on reform,
which each day more dirty money is collected.
Mr. Speaker, I urge my colleagues, please, do not be hammered into
submission. Do not be hammered into submission to cast an indefensible
vote against disclosure. Join us to stop the collection of money so
dirty that your leadership is ashamed to identify the donors.
{time} 1300
The SPEAKER pro tempore (Mr. Kolbe). The gentleman from Texas (Mr.
Doggett) has 30 seconds remaining.
Mr. DOGGETT. Mr. Speaker, I yield the balance of my time to the
gentleman from Missouri (Mr. Gephardt), the distinguished minority
leader.
Mr. GEPHARDT. Mr. Speaker, I am often asked if we can do anything
here this year in a bipartisan way to solve the obvious problems that
our country faces. This is an issue on which the Senate has taken a
definitive position 57 to 42. Senator McCain said yesterday, what could
be more simple. What could be more fair, honest, and straightforward? I
cannot say it any better than that.
This is a moment in which Democrats and Republicans can come together
to pass an end to the secret organizations with undisclosed money. Vote
yes for the motion to recommit. Let us get something done for the
American people in this Congress.
Mr. HOUGHTON. Mr. Speaker, I rise in opposition to the motion to
recommit.
The SPEAKER pro tempore. The gentleman from New York (Mr. Houghton)
is recognized for 5 minutes.
Mr. HOUGHTON. Mr. Speaker, I know there is a lot of emotion on this.
But I would like to speak on the other side of this issue. On May 25 of
this year, just before we left for the Memorial Day break, the
gentleman from Texas (Mr. Doggett) offered a 527 amendment to the
telephone tax repeal. I understand what he was getting at. We are all
trying to accomplish the same thing. But it was a curious proposal. It
would repeal the telephone tax for everyone except for political
organizations that do not comply with the new disclosure requirements.
So the end result would be, at the end of the day, if section 527
organizations were willing to pay a 3 percent phone tax, they could
avoid disclosure. I do not think that was in the spirit of what we were
trying to do.
Today the gentleman from Texas (Mr. Doggett) is proposing still
something else. Though we are trying to repeal the estate and gift tax,
we keep it on the books for section 527 organizations.
These proposals bother me. They only attack part of the problem.
Also, before we left for Memorial Day, I indicated that I was working
with a group of people to try to get together a hearing, and we have
been in session only 3 days since that time. We are going to have the
hearing. It is going to be set for the 20th of this month.
An article in yesterday's Wall Street Journal noted that, under the
proposal offered by the gentleman from Texas (Mr. Doggett), that many
tax exempt organizations would be shielded from disclosure laws, not
full light on all the organizations that are contributing. Why is it
fair to the American people, therefore, to require some tax exempt to
disclose political activities and not all? Why is it right for one
party or another to benefit from bringing some groups into the sunshine
while allowing others to operate under the cloak of secrecy.
We are taking a looking at lobbying and campaign intervention by all
of these groups, regardless of their agenda, not just the 527 groups.
What we would like is disclosure by these groups, but we have to be
careful because we do not want to regulate constitutional rights to
death so that the rights become meaningless.
Yesterday I announced we were going to be having a hearing in
Committee on Ways and Means on the 20th of this month. There are some
that say that we do not need a hearing and just do it. But by doing it,
we can do it the wrong way.
If the majority were to bring this to the floor without a hearing, I
think this would be wrong. My colleague and I serve on the key
committee of the House. The committee has a strong tradition of trying
to do things the right way. We try not to enact legislation piecemeal,
imposing disclosure requirements on some tax exempt organizations but
shielding others for not disclosing them.
Senator McCain said yesterday that he was interested in broadening
this. It was a first step. He wanted to broaden this. This is, of
course, what we are trying to do.
Now, in a political year, there are all sorts of pressures from the
press and from parties and things like that. But I would like to think
that most of us want to reject this.
I am a very strong advocate of campaign finance reform. I signed a
discharge petition on this House floor. I voted for the Shays-Meehan
bill. But I do think that there is another way of doing this and doing
it right.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Texas (Mr. Armey), the majority leader of the House.
Mr. ARMEY. Mr. Speaker, I want to thank the gentleman from New York
for yielding me this time.
Mr. Speaker, what we are discussing here is an important issue. It is
recognized as such by the American people. It is an issue that requires
a much more dignified response by this Congress than what it is getting
on this floor today.
This is not about political vendettas or partisan politics. It is
about the key principle of full and fair disclosure for, as the
gentleman from Texas (Mr. Stenholm) said so eloquently, all
institutions that engage in political advocacy. There are many people
on this side of the aisle that have taken that position for a long
time.
Within the next week, we will have hearings on a measure that will
require full and fair disclosure for all institutions that engage in
political advocacy. There will be a vote on this floor on a bill prior
to the July 4th district work period where we will require full and
fair disclosure for all institutions that engage from political
advocacy without political exemption and without political vendetta.
The SPEAKER pro tempore. All time has expired.
Without objection, the previous question is ordered on the motion to
recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mr. DOGGETT. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. The Chair will advise Members that a vote on
passage, if ordered, will be reduced to a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 202,
noes 216, not voting 17, as follows:
[[Page H4163]]
[Roll No. 253]
AYES--202
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett (WI)
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Campbell
Capps
Capuano
Cardin
Carson
Clayton
Clement
Clyburn
Condit
Costello
Coyne
Cramer
Crowley
Cummings
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Forbes
Ford
Frank (MA)
Franks (NJ)
Frost
Ganske
Gejdenson
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Hooley
Hoyer
Inslee
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
King (NY)
Kleczka
Kucinich
LaFalce
Lampson
Lantos
Larson
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (CT)
Maloney (NY)
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (VA)
Morella
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Phelps
Pickett
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Serrano
Shays
Sherman
Shows
Sisisky
Skelton
Slaughter
Snyder
Spratt
Stabenow
Stark
Stenholm
Strickland
Stupak
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Waxman
Weiner
Wexler
Weygand
Wise
Woolsey
Wu
Wynn
NOES--216
Abercrombie
Aderholt
Archer
Armey
Bachus
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Coble
Coburn
Collins
Combest
Cook
Cooksey
Cox
Crane
Cubin
Davis (VA)
Deal
DeLay
DeMint
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ewing
Fletcher
Foley
Fossella
Fowler
Frelinghuysen
Gallegly
Gekas
Gibbons
Gilchrest
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (WI)
Greenwood
Gutknecht
Hall (TX)
Hansen
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Jenkins
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
Martinez
McCollum
McCrery
McHugh
McInnis
McIntosh
McKeon
Metcalf
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Paul
Pease
Peterson (PA)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanford
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Sherwood
Shimkus
Shuster
Simpson
Skeen
Smith (NJ)
Smith (TX)
Souder
Spence
Stearns
Stump
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Young (AK)
Young (FL)
NOT VOTING--17
Blumenauer
Clay
Conyers
Cunningham
Danner
Gillmor
Gilman
Istook
Kind (WI)
Klink
Lazio
Markey
McDermott
Smith (MI)
Smith (WA)
Vento
Watt (NC)
{time} 1323
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. Kolbe). The question is on the passage
of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. ARCHER. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 279,
noes 136, not voting 20, as follows:
[Roll No. 254]
AYES--279
Abercrombie
Aderholt
Andrews
Archer
Armey
Baca
Bachus
Baird
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Berkley
Berry
Biggert
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blunt
Boehlert
Bonilla
Bono
Boswell
Boucher
Boyd
Brady (TX)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Capps
Castle
Chabot
Chambliss
Chenoweth-Hage
Clayton
Clement
Coble
Coburn
Collins
Combest
Condit
Cook
Cooksey
Costello
Cox
Cramer
Crane
Cubin
Davis (VA)
Deal
Delahunt
DeLay
DeMint
Deutsch
Diaz-Balart
Dickey
Dooley
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Eshoo
Etheridge
Everett
Ewing
Farr
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (WI)
Greenwood
Gutknecht
Hall (TX)
Hansen
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Holt
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Jefferson
Jenkins
John
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
King (NY)
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Lampson
Lantos
Largent
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lucas (KY)
Lucas (OK)
Maloney (CT)
Manzullo
Martinez
McCarthy (NY)
McCollum
McCrery
McHugh
McInnis
McIntosh
McIntyre
McKeon
McNulty
Metcalf
Mica
Miller (FL)
Miller, Gary
Mink
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Pascrell
Paul
Pease
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Regula
Reynolds
Riley
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanchez
Sandlin
Sanford
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Smith (NJ)
Smith (TX)
Souder
Spence
Stearns
Stump
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thornberry
Thune
Tiahrt
Toomey
Traficant
Udall (CO)
Upton
Velazquez
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Wicker
Wilson
Wise
Wolf
Wynn
Young (AK)
Young (FL)
NOES--136
Ackerman
Allen
Baldacci
Baldwin
Barrett (WI)
Becerra
Bentsen
Berman
Bonior
Borski
Brady (PA)
Brown (FL)
Brown (OH)
Capuano
Cardin
Carson
Clyburn
Coyne
Crowley
Cummings
Davis (FL)
Davis (IL)
DeFazio
DeGette
DeLauro
Dicks
Dingell
Dixon
Doggett
Doyle
Edwards
Engel
Evans
Fattah
Filner
Frank (MA)
Frost
Gejdenson
Gephardt
Gonzalez
Green (TX)
Gutierrez
Hall (OH)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hoeffel
Holden
Hoyer
Jackson (IL)
Jackson-Lee (TX)
Johnson, E. B.
Jones (OH)
Kanjorski
[[Page H4164]]
Kaptur
Kennedy
Kildee
Kilpatrick
Kleczka
Kucinich
LaFalce
Larson
Lee
Levin
Lewis (GA)
Lowey
Luther
Maloney (NY)
Mascara
Matsui
McCarthy (MO)
McGovern
McKinney
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Moakley
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pastor
Payne
Pelosi
Pickett
Pomeroy
Price (NC)
Rangel
Reyes
Rivers
Rodriguez
Rothman
Roybal-Allard
Rush
Sabo
Sanders
Sawyer
Schakowsky
Scott
Serrano
Sherman
Slaughter
Snyder
Spratt
Stabenow
Stark
Stenholm
Strickland
Stupak
Taylor (MS)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (NM)
Visclosky
Waters
Waxman
Weiner
Wexler
Weygand
Woolsey
Wu
NOT VOTING--20
Blumenauer
Boehner
Clay
Conyers
Cunningham
Danner
Gillmor
Gilman
Istook
Kind (WI)
Klink
Lazio
Markey
McDermott
Packard
Smith (MI)
Smith (WA)
Vento
Watt (NC)
Whitfield
{time} 1332
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Mr. ISTOOK. Mr. Speaker, on rollcall No. 254, I was unable to attend
and vote due to a family medical emergency. Had I been present, I would
have voted ``aye.''
Mr. PACKARD. Mr. Speaker, I was meeting with the clerk and staff of
my subcommittee in preparation for our markup on my appropriations
subcommittee and unavoidably missed the last vote apparently. I feel
badly having missed such a crucial vote. Had I been present, I would
have voted ``yes'' on final passage.
____________________