[Congressional Record Volume 146, Number 94 (Wednesday, July 19, 2000)]
[House]
[Pages H6587-H6593]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             NIGHTSIDE CHAT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Colorado (Mr. McInnis) is 
recognized for 60 minutes.
  Mr. McINNIS. Mr. Speaker, I am back for a nightside chat. I have 
three subjects which I would like to cover tonight. The first one is a 
sad situation that has occurred out in the State of Colorado, a very 
tragic situation.
  The second that I think is very important for us to discuss, a 
subject which I addressed just a couple of days ago but, which 
subsequent to my discussions, I have heard some comments on this House 
Floor that are, in my opinion, discouraging, comments that I think are 
off base, comments that I think are not based on reality, reality 
beyond the Potomac River, reality beyond this large city of government 
out here in the East. I want to address the death tax, once again.

[[Page H6588]]

  The third subject which I would like to address this evening based on 
the time that we have left is, of course, Social Security. Regarding 
the death tax and the Social Security issues, I hope that many of my 
colleagues will go out, when they go to their districts and talk, 
especially to their young constituents, because the Social Security 
challenge in this country is a challenge based on: can we deliver for 
the young people of this country. The question about death taxes is, 
when we have something from a generation, can a generation legitimately 
expect to work in their lifetime and be able to pass something on to 
the young generation behind them. So tonight's comments are really 
directed to the younger people of this country.


                      In Memory of Fred Bitterman

  Mr. Speaker, first of all, let me cover a subject of which I stand 
forward with a very hurt heart. A friend of mine, a friend of the 
community of Glenwood Springs, Colorado, an officer of the Colorado 
State Patrol, a friend and a strong supporter and a leader of law 
enforcement in the State of Colorado, was tragically killed Tuesday. 
Captain Fred Bitterman, who was the commander of the Glenwood Springs 
Unit of the Colorado Springs State Patrol Unit, lost his life in a 
tragic accident. This was a man who was a good cop.
  Mr. Speaker, I used to be a police officer. I got to serve with the 
Colorado State Patrol. I was not a Colorado State patrolman, I was a 
city police officer, but I worked alongside the Colorado State Patrol. 
These guys and gals are professionals. They bring a great pride to our 
State, and the Colorado State Patrol in Colorado is seen as a very 
elite unit. Of course, to be seen and respected by the people and the 
citizens of Colorado as an elite unit, it means they have had good 
leadership, and at the very front of that good and strong leadership 
was this gentleman named Fred Bitterman.
  Mr. Speaker, Fred was 59 years old. He leaves behind six children and 
a number of grandchildren, and his wife, Kathy. I want my colleagues to 
know that these are the kind of people that make this country great. So 
it is with a great deal of sympathy that I acknowledge the fine service 
and the fine gentleman that this captain was.
  I also want to share with my colleagues that he not only enjoyed an 
excellent reputation in his profession of law enforcement, but he was 
known throughout our community as a good neighbor. Mr. Speaker, one can 
hardly beat a good neighbor. But probably more important than the 
professionalism in the field of law enforcement, probably more 
important than the recognition as a good neighbor, was the fact that he 
was a very strong family man, and each of those six children and those 
grandchildren and all of the family that he had and all of the friends 
that he knew and all of the people throughout these many, many years of 
service in the Colorado State Patrol that he helped at the scene of an 
accident or at the scene of a disturbance, or all the people that he 
comforted during their particular times of tragedy, this man will be 
sorely missed. It is that reputation which comes to the top. He was the 
cream that rose to the top.
  Captain, we are going to miss you.


                             The Death Tax

  Mr. Speaker, I want to move to another subject now concerning the 
death tax. I have a few quotes here. Let me step back to two nights 
ago. Two nights ago, I had an opportunity to speak to my colleagues 
about the death tax and the impact that the death tax has on the 
communities across this country.
  Now, we should remember that Washington, D.C. is a very unique 
community. Washington, D.C. is the only city in this Nation where 
really, most of the city is dependent upon money coming from the 
outside into the government in Washington so that the city can thrive. 
This is a city that thrives on big government. This is a city that 
thrives on taxes. So understandably, the people, a lot of the people in 
Washington, D.C., in my opinion, enjoy the fact that these taxes head 
in their direction. A lot of people are dependent, their lifestyles, 
they know nothing but government, that is all they know. But 
Washington, D.C. is a unique community, and as I stressed in my 
comments the other day, there are a lot of communities outside of 
Washington, D.C. where the transfer of money from their community to 
the government city of Washington, D.C. works great pain on their 
communities. It is a sacrifice on those communities.
  By the way, we know that the money that comes to Washington, D.C. is 
not the money of the government of Washington, D.C.; it is the money of 
the people of whom this government represents in Washington, D.C. it is 
the people's money. And we have a fiduciary responsibility, colleagues, 
as elected official, as representatives, to make sure that we always 
understand those dollars belong to the people of this country. They do 
not belong to the bureaucracy in Washington, D.C.
  Now, why do I make these comments? What leads me to this?
  Mr. Speaker, what leads me to this is simply a statement that was 
made after I gave my comments the other day, and I quote from a 
Democrat, and I will get on this in a minute, but let me quote from an 
individual who happens to be a Democrat: ``Some say we ought to pass 
these massive tax cuts because this is the people's money.'' Well, that 
is exactly why we ought to have tax cuts back here, because we have now 
reached record surpluses. It is the people's money.

                              {time}  2145

  We ought to keep that in mind. Now clearly, we have to have enough 
money to operate. The speech before me given by some Democrats about 
mental health, it has some legitimate points in it: our education, our 
military, our interstate commerce, our highways. Of course it costs 
taxpayer dollars.
  But do we have a right on any basis whatsoever to keep the excess 
money, or do we have an obligation to work with tax credits and tax 
refunds?
  Mr. Speaker, I would address the gentleman from Georgia (Mr. Linder) 
for just one moment.
  Mr. Speaker, I understand that the gentleman, too, lost a good friend 
from the State of Georgia. I want the gentleman to know that the people 
of the State of Colorado send their greatest sympathies. I know that 
the Senator was a fine friend of the gentleman's, and I want the 
gentleman to know that those of us in the West feel the gentleman's 
pain and pass on their sympathies.
  I yield to the gentleman from Georgia (Mr. Linder).
  Mr. LINDER. Mr. Speaker, that is a gracious and kind statement from 
the gentleman. I thank him very much.
  Mr. McINNIS. Mr. Speaker, my comments were directed at the death tax, 
and how that impacts the community. What is the death tax? We all know 
that the Federal government decided some time ago that there were 
wealthy families in this country, the Rockefellers, the Ford's, the 
Carnegies, and people like that.
  Back then there was kind of a rage, kind of a class warfare type of 
situation. We see it today. We see people in a country that, by the 
way, has as its model an opportunity for free enterprise, an 
opportunity to make something of oneself, if one wants, or an 
opportunity to enjoy the fruits of one's labor.
  Yet, when an individual, especially back at the beginning of this 
death tax, at that time, made something and had an opportunity to enjoy 
the fruits of their labor, there were people in our society who were 
jealous; who said, we ought to do something to punish people that have 
money. We ought to go after those Carnegies and those Fords and 
Kennedys, people like that. Let us go after them.
  So they came up with this concept called the death tax. It is a tax 
that is placed upon the family on the event of a death. It is 
interesting, back here in Washington, D.C., they look for any 
opportunity they can, any event that they can to call it a taxable 
event. Many years ago they said, hey, why not when someone dies? After 
all, they will not be around to object anymore. That will be a good 
opportunity to take a little money from somebody who worked and 
transfer it to a bureaucracy that did not, so let us go ahead and tax 
the death of an individual.
  I am going to go again into my comments about what it does to a 
community. I will give some firsthand examples, Mr. Speaker, of how it 
has impacted some small people; not the Carnegies, not the wealthiest 
people of this country, but some people out

[[Page H6589]]

there, people that own a bulldozer and a backhoe and are trying to make 
it, a farmer, a rancher.
  What disturbed me after I made my comments the other night was the 
following night I heard these kinds of comments. Let me say, in this 
House, as Members know, 65 Democrats joined with the Republicans and we 
passed a bill to eliminate that death tax. Why? Because it is the most 
unjustified tax that we have in our system. The tax is simply there to 
punish, nothing more, simply there to punish. We cannot justify it. 
When we look at the basis of our tax system, there is no way that one 
can defend it other than, of course, saying that one wants to attack 
the wealthy.
  Do Members know what, we had 65 Democrats who agreed with the 
Republicans, so it was a bipartisan bill. But there are still two teams 
in this House Chamber. Members know that, we have two teams in this 
Chamber. One team, as far as I can recall from the vote, all of the 
Republicans and 65 of the Democrats, that team said that the death tax 
is inherently unfair. That team says there is no justification for the 
death tax. That is the team to get rid of the death tax. Then we have a 
team on the other side, and let us face it, it is the Democrats; not 
all of them. But the team, the second team is comprised of the 
Democrats who say, hey, wait a minute, we ought to have a death tax.
  In fact, that team is led by the President and the Vice President, 
who not only disagree with doing away with the death tax and have 
threatened to veto the bill which would eliminate the death tax, but 
they have the audacity, the administration, our president and our Vice 
President have the audacity this year in their budget to increase or 
propose an increase, an increase in the death tax of $9.5 billion.
  That is a lot of money. That is going to hurt a lot of people. But 
that is $9.5 billion more, $9.5 billion, not million but billion more 
that is going to come from all of the communities across the United 
States and be funneled right into Washington, D.C. simply as a result 
of a death, simply as a result of the death of these individuals.
  I do not think we ought to increase it. I do not think it ought to 
exist. Tonight my comments are primarily directed at that second team, 
that second team that thinks the death tax is justified.
  That second team made some comments. Let me repeat a couple of 
others. ``Oh, this death tax, eliminating it, it goes to the wealthiest 
families in America.'' Well, I have news for them. I want them on the 
second team, why do they not take a little time to get beyond the 
Potomac River and to come out. I will take them out to some farms, some 
ranches.
  I will show them in Colorado some small contractors, a contractor 
that has a bulldozer, a dump truck, a backhoe, and all of a sudden they 
fall into the classification of wealthy. I will show the Members people 
that just own simply homes in Colorado.
  For example, my district, which is the Third Congressional District, 
has seen strong economic growth. Our property values have gone up. I 
can show Members people who have a small business, maybe a little 
bookstore, and they own their home, and all of a sudden, to the second 
team they fall in that classification of wealthy. They fall in that 
classification that they think they are justified on taxing them simply 
because there has been a tragedy or death in their family.
  These people are not wealthy. Even if they were wealthy, what 
justification do they have to go out and tax the family simply because 
there has been a death? By the way, let us make it very clear, this 
property that is being taxed simply because there was a death in the 
family is property that has already been taxed. In some cases, it has 
been taxed and taxed and taxed.
  We do not have citizens out there who are being assessed the death 
tax because they did not pay taxes on the property that they left. This 
is property that has already been taxed. At a minimum, at a minimum, it 
is double taxation. Yet, the second team still has the gumption to 
stand up, it almost sounds like a positive word, so I still have to go 
back to my other word, the audacity to stand up and say, yes, but it is 
still justified. It is a good way to punish the wealthy. Besides, it 
only hurts the wealthy. We will talk about that in a moment, about what 
it does to a community. ``You know, we need the money in Washington.'' 
That is the next one.
  These are quotes from the Congressional Record: ``I think Democrats 
feel that we do not have to give Bill Gates and Ted Turner and Steve 
Forbes a massive multi-billion dollar tax cut to protect the family 
farmer in Texas or Gatesville or some small businessman in Texas.''
  I have news for them, the second team, they can be assured that the 
Gateses and the Kennedys and the Turners and the Forbes and the 
wealthiest families in this country have got some of the finest lawyers 
in this country making sure that through the use of foundations and 
limited partnerships and other items, that they are not going to pay 
this tax.
  This is not about the Forbes, the Carnegies or the Fords or the 
Kennedys, this is about the families in America who have a small farm, 
or the families in America who have a small business, or the 
contractors who simply have, and this is all it takes, a backhoe, a 
bulldozer, and a dump truck, and all of a sudden this is the guy or gal 
we are talking about.
  These are not these big wealthy people, these are everyday people in 
communities outside of Washington, D.C. that they are about to continue 
to devastate if they meet an untimely death, or if they do not have the 
money to hire the legal counsel to go out there and protect their 
assets from their own government, who has already taxed them throughout 
their lives on this property, to protect them from their own government 
coming in and taking that property because a taxable event called a 
death took place.
  Let me make another quote, another quote given after I made my 
remarks the other night by, again, this second team. Remember, the 
first team has 65 Democrats and all the Republicans on it. They say, 
get rid of the death tax. The second team has, unfortunately, all 
Democrats who want to keep the death tax in place.
  Let me quote from that team: ``So, this business about being a 
farmer-driven issue, this being a small business-driven issue, that is 
fiction. That is bait and switch. They will hold out the farmer, they 
will hold out the small business owner. Believe me, repeal of the death 
tax is not about them at all.''
  The heck it is not about them. Where do they come off that we stand 
up here and say we ought to get rid of it because it does impact farms 
in this country and ranches, yet they seem to say up here, hey, it is 
not about that at all. That is exactly what it is about. They need to 
leave the fine halls of this Capitol and go out to small-time America 
and look at the ranches, the farms, the small businesses.

  More than that, they need to look at the communities where this money 
is circulating. Look at the communities where these families are 
helping that community thrive economically, and look what happens when 
we tax upon a death. We do not tax the families in these communities 
and then keep the money in the local community.
  For example, if we have a death of an individual, let us say a 
contractor who owns a bulldozer, a backhoe, and a dump truck, and 
therefore is subject to the estate tax, and especially if we throw 
their home in there and if they own their own office.
  Let us say that contractor is in Denver, Colorado, and the contractor 
meets an untimely death, so the government swoops in to tax it. Do 
Members think the death tax that is imposed upon that estate, that that 
money, when it goes to the government, is kept in the community of 
Denver, Colorado? Of course, it is not. It is money taken out of 
Denver, Colorado, and transferred to the government in Washington, D.C.
  Do Members think for one moment that the government in Washington, 
D.C. says, Gosh, here is some money on property we have already taxed 
coming from Denver, Colorado; let us go ahead and send that money back 
to Denver, Colorado, so they can have better parks, light rail, or some 
other type of improvement to their community, because after all, these 
dollars came from that community? Of course, they do not say that in 
Washington, D.C.
  I go on: ``The first question we want to address is, are the 
Republican tax

[[Page H6590]]

bills fiscally responsible?'' There are two key bills in front of us 
right now, two key bills that are going down to the President that will 
reduce taxes. Both of those bills are not justified in our tax system. 
One of them is called the marriage penalty. The second one is called 
the death tax.
  The second team over here that says, hey, they take a look at this 
and they say, are these tax bills reducing the tax, getting rid of the 
marriage penalty and getting rid of the death tax? Forget the question 
whether they are justified or not, but is it fiscally responsible to 
get rid of them?
  Guess what, second team, do they know what percentage of the surplus 
these two combined take up, what it will cost us of the surplus? That 
is right, 2 percent, 2 percent of our surplus. We are saying, team 
number one, again, which was 65 Democrats and the entire Republican 
body, we are saying that 2 percent of that surplus ought to go back to 
the taxpayers in the communities from whence it came because it got to 
us through a marriage penalty, after all, in a country which encourages 
marriage, a country which says, look, we not only encourage it, we 
think it is your responsibility to be married. We think it is a basic 
part of families.
  The death tax, here it is, taxing property that has already been 
taxed. Neither one of these are justified. But do Members think it is 
fiscally irresponsible because we take 2 percent, 2 percent of that 
surplus and we send it back to the taxpayers by saying to them, from 
now on, when you get married, you are not going to be penalized for it; 
and number two, your death is no longer classified as a taxable event.
  I go on, here. Again, I want to repeat the one statement that was 
said the other night: ``Some say,'' and that (some) is me, by the way, 
team number one, so let us just put the word, although the quote is 
``some,'' let us put the word ``team number one'' in there.

                              {time}  2200

  Team number one says we ought to pass these massive tax cuts because 
this is the people's money. Again, they are darn right it is the 
people's money. It is not their money. It is not my money. We simply 
manage the money. We have a responsibility to manage this money in a 
fiscal way, but not only just fiscally responsible, we have a moral 
obligation to say, is it justified to penalize somebody because they 
are married, is it justified to tax somebody because of the event of a 
death.
  Now, let me talk about something else, and, again, going back to this 
quote and this business about being farmer driven, small business 
driven, that is bait and switch. What a song and dance. That is simply 
a song and dance.
  Let us take a look at what happens in the community. I am actually 
going to give my colleagues some true examples of how it has impacted 
these communities. By the way, these examples are not going to come 
from the Carnegies or the Fords or the Kennedys or the wealthiest 
people of this country. These are going to come from Main Street 
America. These will be from Main Street America.
  Let us for a moment, before we go into these true-life stories, let 
us talk about something else. Number one, remember what I said. Here is 
Washington, D.C. Washington, D.C., as I said earlier, when one takes a 
look at the map, one will notice there is Florida that comes over like 
that. We better centralize Washington a little more. But when we look 
at Washington, D.C., remember what I said earlier, Washington, D.C. is 
the only city in the country which, the larger the government becomes, 
the more prosperous Washington, D.C. becomes.
  Washington, D.C. has the largest percentage of any city in the 
country of people who work for the government. In Washington, D.C., 
many people's task, their job in Washington is to reach out with their 
fingers and gather as many tax dollars as possible and bring them to 
this city, bring it in from every direction in the country, bring that 
money to Washington, D.C. so Washington, D.C. turns around and can 
redistribute it on their terms, on their terms.
  Well, let us do not talk about what goes on in Washington, D.C. Let 
us talk about what goes on in this community out in Utah or this 
community down in Louisiana or this community up in Montana or this 
community over in Wyoming or Idaho or Oregon or Washington or 
California. Let us for a moment talk about community.
  Here is our community. Let us take two examples in our community. One 
of a very wealthy person. Let us go ahead and let us hit that nail on 
the head. Let us talk about an individual who, through the American 
dream, through the American free enterprise system, worked hard and 
became wealthy.
  Let us say, for example, it was a person that developed a better 
mouse trap or maybe they are the ones that invented the seat belt, and 
every car needs it, so they are very wealthy. Here is that very wealthy 
person.
  Now, team number two says that one ought to go after this wealthy 
person simply because of the fact that they are wealthy, no other 
reason, go after them on their death because they died with money in 
their hands. They say take that money and send it to Washington.
  Well, let us take a look at where that money is in our community, 
this is our community, before it is sucked out of our community and 
sent east to Washington, D.C.
  That money in that community, and there is one exception, if this 
very wealthy individual in that community takes that money and goes out 
in on his backyard or her backyard and digs a hole and buries it in the 
ground where it does not circulate in the community, then one has no 
benefit of that money being in the community. But in every other case, 
and, by the way, I know of no one who does that, but in every other 
case, that money in the community provides jobs. That money in the 
community goes to, not national, but community charities, maybe the 
local church, maybe help out the local school. That money in that 
community goes to the local bank; and that bank in turn loans out money 
to small business people or other people. Maybe they want to improve 
their house. Maybe they want a student loan. Maybe they want a new car. 
In other words, this money that this wealthy person has circulates in 
our community. But it circulates in our community.
  What happens when X up here, when he or she dies, and the Federal 
Government decides to impose a death tax? What happens is the Federal 
Government comes in and takes this money used for jobs, this money used 
for local charity, this money used as a tax basis or otherwise for 
schools, this money deposited in the local bank, and it takes that 
money, and it moves from here to Washington, D.C. Then the people in 
Washington, D.C. get to use it in their community or get to redisburse 
it as they see fit. Example number one.
  Now, let us talk about example number two in our community. In our 
community, we have somebody who is not wealthy, and I will give my 
colleagues a good example, a ranching family. Now, I come back to this 
quote given by team number two. So this business about being a farmer 
driven issue, as if it is not a farmer driven issue, about being a 
small business driven issue, as if it is not a small business driven 
issue, that is fiction. It is bait and switch.

  This is no bait and switch. Lock, stock and barrel, it is about small 
business. Lock, stock and barrel, it is about small farms. Lock, stock 
and barrel, it is about small ranches. Lock, stock and barrel, it is 
about our young people. It is about the American dream.
  As I said the other night with my comments, my wife and I, one of our 
goals in life, and we have sacrificed, we would like to have a boat. We 
really would like to have a boat at Lake Powell. We just bought a car 
the other day. We bought a used car. We would like to buy a new car. 
But do my colleagues know why? We are not a hardship case. I am not 
asking for that kind of sympathy. But we have made a conscious decision 
to try and put something aside for the next generation behind us so 
that they know they will have a college education, so that our 
grandchildren, we do not have grandchildren yet, but we hope to have 
grandchildren, that they will be able to have a college education. 
Maybe they will have enough money for a down payment on a home. Is that 
not the American dream? Is that not what it is about?

[[Page H6591]]

  The previous speaker to me who spoke prior to my speech spoke about 
the youth of America. Now, her topic was a little different, but, 
nonetheless, one can look at most of the speeches given on this House 
floor, and they talk about the young people. They talk about the hope 
of this great country and how the hope is fundamentally based on the 
young people. Why not give them an opportunity? Why not give them a 
head start?
  So it is about small business. It is about the dream and helping the 
next generation. It is not about the wealthiest people necessarily.
  One may have an, and the reason I keep coming back to this 
contractor, because, as cited in the Wall Street Journal, if one is a 
contractor who owns a bulldozer, a dump truck, and a backhoe, they are 
now subject to the estate taxation in this country because team number 
two considers them wealthy.
  So when one goes into a small community, and here is one's 
contractor, he has got the dump truck, he has got the backhoe, and he 
has got the bulldozer.
  Here is Joe Rancher over there. Now, Joe Rancher has some land. Let 
us say the land went from one family to the next. I can tell my 
colleagues my in-laws are ranchers in Meeker, Colorado. They take great 
pride in the fact that the land has been in the family, the same ranch, 
since the 1880s, 120 years that ranch.
  But this is the generation whereupon the biggest test will come 
because they do not have the money to pay off the people in Washington, 
D.C., the government, in the event of an untimely death in that family. 
So it is about that ranching family.
  So what happens? By the way, anybody that cares about the 
environment, this is also about the environment, because in our example 
here of the ranch, with property, do my colleagues know what happens to 
that family upon the untimely death? Now, remember, again, if they are 
very wealthy, they have got estate planning. They can probably protect 
it. But the middle class rancher, and I would venture to say most of 
the ranching communities and most of the agriculture-based communities 
and most of the small business people in this country are not wealthy 
enough to go out and hire an entire regime of attorneys and CPAs to 
help them avoid this tax.
  Take a look at what happens from an environmental point of view on 
this ranch. Do my colleagues know what is going to happen if there is a 
death there and they are subject to that estate tax? They are not going 
to be able to carry on the ranching operation. The only option they 
have, especially if they are in Colorado or Wyoming or one of these 
boom States like Utah or Arizona, their response is to go out there and 
divide this thing up into housing units, put the acres in there and put 
in housing subdivisions. That is what the government is forcing them to 
do, and this open space, not to say the least about the tradition of 
the ranch, goes up in a puff of tax.
  Now look at this small business person that has that contractor. That 
contractor needs his bulldozer or she needs her bulldozer. They need 
their backhoe, and they need their dump truck. So we have a death. They 
are subject to the death tax. What happens, they have to sell the dump 
truck. Do my colleagues think this business can operate now with a 
backhoe and a bulldozer, but no dump truck? Or let us say they sold the 
bulldozer. Do my colleagues think they can operate just with a backhoe 
and a dump truck after paying its penalty to the government?
  I am saying to team number two, this makes a difference.
  Let me move to a few, as I said, examples. I apologize to my 
colleagues here for reading. Most of my comments are not from written 
script at all, but these are written, and I want to be sure that I read 
them correctly. These are letters that we have gotten or statements we 
have taken. This is not fiction, by the way. This is not, as the second 
team calls it, bait and switch. This is about real-life America. This 
is about the people that live outside the Beltway of Washington, D.C.
  Let me begin with a story about Ray. Ray is deceased. He died earlier 
this year. He owned a service station on the corner. Ray had this 
service station for 27 years. For 27 years, other service stations were 
built on the other three corners. The intersection became busy. The 
roads forming that intersection were expanded to four lanes. So it was 
a good place for Ray's business. He had two service bays plus a car 
wash. He had some old pumps and old equipment. He cleared $70,000 a 
year, not wealthy, but he made a good living through his years and 
years of hard work. His wife she did the bookkeeping for the business. 
His grown son worked there. Eventually, the son and his family were 
going to take over the business.
  When Ray died, he had a $50,000 term insurance policy, $60,000 in 
municipal bonds, $174,000 in his retirement plan, and of course the 
service station. A few months after he died, unfortunately Ray's wife 
passed away.
  Upon the death of his parents, the son who was going to take over the 
business discovered that the land upon which the service station sat 
had appreciated over the years and was now worth $1.7 million. The 
service station and the equipment was worth about $158,000. He also 
learned that his father's retirement plan was funded on a before-tax 
basis. So not only would he have to pay the death taxes, but income 
taxes would be due on the retirement.
  The son was now in a situation that was very dismal, and he began 
looking for a way to pay the taxes on this estate. The son's conclusion 
was, if I can run this as well as my father or even better, I can make, 
maybe, $70,000 a year, but I am going to have to pay somebody to keep 
the books, because his mom kept the books before. Now he is going to 
have to pay somebody, so it is going to be a little tighter.
  He did not have a proven record so the only thing he could do was to 
borrow against the land and the equipment to pay the death taxes. 
However, when one looked at the revenue that came off the service 
station, it was not enough to service the interest on the loan that he 
had to take to pay off the government on property that had already been 
taxed. He has no choice but to sell the business.
  Here is a letter from Derek Roberts. ``My family has ranched in 
Northern Colorado for 125 years.'' 125 years, Mr. Speaker. Think of how 
many generations in 125 years were on this farm. ``My sons are the 
sixth generation to work this land. We want to continue, but the'' 
Internal Revenue Service ``is forcing almost all ranchers and many 
farmers out of business. The problem is'' the death tax.
  ``The demand for our land is very high and 35-acre ranchettes are 
selling in this area for as high as'' several thousand dollars ``per 
acre. We want to keep it open space, but the U.S. government is making 
it impossible because we will have to pay 55 percent tax'', 55 percent, 
55 cents on every dollar ``when my parents pass on.''

                              {time}  2215

  ``Ranchers are barely scraping by these days anyway, but since we 
want to save the ranch, we are in trouble. The family has been able to 
scrape up the estate taxes as each generation dies up to this point in 
time. This time, however, I think we're done for. Our only other option 
is to give the ranch to a nonprofit organization, and they all want 
that, but they won't guarantee they won't develop it.
  ``My dad's 90 years old, and we don't have much time to decide what 
to do. We are one of only two or three ranchers left around here. Most 
of the ranches have been subdivided. One of the last to go was a family 
that had been here as long as our family. When the old folks died, the 
kids borrowed money to pay the taxes. Pretty soon they had to start 
selling the cattle to pay the interest on the money that they borrowed 
to pay the taxes. When they ran out of cattle, their 18,000 acre ranch 
was foreclosed on, and now it's being developed. That family, by the 
way, now lives in a trailer near town, and the father is a highway 
foreman.
  ``If you want to stop sprawl, if you want to preserve ranching, you 
better ask the government to get off the backs of family farms and 
ranches.''
  This letter is from Ron Edwards. ``Dear Representative, I'm writing 
to bring your attention to an issue of the utmost importance to me, my 
family, my employees and businesses: Elimination of the death tax. I 
urge you to support and pass death tax repeal legislation this year.''

[[Page H6592]]

  Mr. Speaker, I would like Ron to know that we passed it out of the 
House, and the good news is that we passed it out of the Senate. 
Unfortunately, the President and the Vice President have vowed to veto 
that legislation. And, unfortunately, I have to report that in this 
House, while 65 Democrats and the Republicans supported the repeal of 
it, there is a team, team number two, that wants not only to keep it, 
but the administration is asking to increase it.
  ``We are celebrating 66 years in business.'' Sixty-six years in the 
same business. ``My grandfather Vic started with a fruit and vegetable 
stand in 1933 at our current location east of Fort Morgan, Colorado. 
The business grew into a grocery store and a lawn and garden center. My 
father Vic, Vic Junior, is 80 years old and, unfortunately, in poor 
health.
  ``No business can remain competitive in a tax regime that imposes 
rates as high as 55 percent upon the next generation that wants to take 
that business. Our tax laws should encourage,'' and this is probably 
the most important sentence that I have read in any letter, in any 
letter that has come to me about the death tax. This sentence written 
by Ron Edwards out of Fort Morgan, Colorado, is probably the most 
important, the most pertinent sentence to the death tax that I have, 
and let me read it. ``Our tax laws should encourage rather than 
discourage the continuation of these businesses.''
  Let me repeat that. Our tax laws should encourage rather than 
discourage the continuation of these businesses. It is the American 
Dream to be able to pass from one generation to the next generation our 
mechanic shops or our ranches or our bulldozers or the family farm. And 
this gentleman right here, he is not a lawyer, he is not a politician, 
he is not a bureaucrat in Washington, D.C., he is not a C.P.A. he 
simply says I am confused; should it not be the policy of the United 
States Government to encourage rather than discourage the continuation 
of these businesses.
  ``While being a member of the House Ways and Means Committee, I'm 
sure you already know the urgency for estate tax repeal is supported by 
the Joint Economic Committee study Economics of the Estate Tax. Family-
owned businesses and their employees will continue to suffer until this 
unfair, unprotective and uneconomic tax is abolished. My wife Vicki and 
I are active in the party and look forward to working with you and your 
staff to enact some common sense legislation to preserve and promote 
our Nation's family-owned enterprises.''

  Now, let me read some testimony. First of all, colleagues, let me say 
that I fully intend to address Social Security next week, but tonight 
it is so important to talk about this death tax, especially after 
hearing the comments made subsequent to my comments the other evening. 
So I will continue on, and let me briefly talk about an article out of 
the Aspen Times, Aspen, Colorado.
  ``There are a lot of tales to be told about the conversion of former 
ranches into luxury homes or golf courses throughout this valley. 
Sometimes it was a simple financial decision, a choice to take 
advantage of soaring development values in the face of plummeting 
cattle prices. But for other families, the passing of a parent meant 
the passing of a way of life.'' The passing of a parent meant the 
passing of a way of life.
  ``We've been around a long time,'' says this ranch owner Dwight. 
``The family roots are dug deep along Capitol Creek Road in old 
Snowmass, and for nearly a century heritage and hard work,'' heritage 
and hard work, ``were enough to sustain those who lived on this ranch. 
But that all changed in 1976.
  ``Until Dwight's father's death, each generation presided over a 
working cattle ranch that was both the lifeblood and the livelihood of 
this clan. His later years were lean times, but the fate of the ranch 
was not at risk until the Internal Revenue Service and the government 
of the United States came to tax us because he died.
  ``The tax bill came to $750,000, and what it took to pay this bill 
was one-half of the ranch and the ability to take our cattle to migrate 
in the winter months and 10 years to pay the last installment.'' Just 
to pay those taxes on property that had already been taxed.
  ``What those taxes took was also something very vital, the ability of 
the next generation to support the family by working the land that had 
been in the family for so long. Dwight now works as a mechanic for the 
Roaring Fork School District, and then at night when he gets home he 
gets to work on what's left of the ranch. He doesn't mind the long 
hours he has to put in. What does get under his skin, however, is the 
memory of how an IRS agent overseeing his father's taxes either didn't 
recognize the devastation that was about to occur or didn't care. It 
was just pay us or we will seize everything. If anything's left over, 
you can keep it, but if you can't make ends meet on what's left, then 
you can hit the streets.
  ``Our family has no intention of selling the remaining acres, but we 
really don't know if our daughters are going to be able to continue to 
keep what is left intact. With only half the land to graze and the 
tough prices in the ranching community, the ranch itself is only making 
enough to cover the annual property taxes and our operating expenses. 
It is the day job at the school district as a mechanic that pays the 
doctor bills, the car insurance, the grocery bills and everything else.
  ``There's always hope that things will change before my daughters 
need to make any decisions about the ranch, but I wonder if people 
really think about the permanent changes that will occur when the ranch 
is sold, dividing it up, chopping up a ranch that will never again in 
the history of this country become a ranch. It will become a housing 
subdivision.
  ``There are some movements with hope in the right direction, trying 
to eliminate the death tax. But are they moving quickly enough?''
  That's the thought of mainstream America out there. Let me read 
another quote, and I will just take a couple of key areas here. This 
was a statement given on the record.
  ``I have been a member of small business for more than 10 years. My 
family lives in the central part of Idaho. Our family's cattle ranch is 
outside of Mackay, Idaho. The ranch consists of 2,600 deeded acres. My 
youngest brother lives and manages the ranch with my brother. We all 
grew up alongside my father, mother and grandfather. We worked 
weekends, we worked holidays, we worked summers branding, moving, and 
riding the range, fixing fences. We didn't have a lot of material 
things, but we had our family and the land and the life-style that we 
loved.
  ``On October 5, 1993, my father was accidentally killed when his 
clothing got caught in the farm machinery. He was 71 and he was 
healthy. He worked dawn until dusk, and he loved the land and he loved 
his family. We were always a very close-knit family and the hub of our 
family was my father and the ranch. Even though my brother, my sister, 
and I don't live there anymore, we all go home, along with the 
grandchildren, to help with the seasonal work. We take as much time off 
as we can to go up and help the ranch.
  ``My father's death was the most devastating event that any of us 
have ever gone through. The second most devastating event was sitting 
down with our estate attorney after my father's death. I will never 
forget his words. `There is no way you can keep this place. Absolutely 
no way.' Still in shock from the accident, I said, how can this be? We 
own the land. We have no debt. We just lost our father and now we're 
going to lose the ranch?
  ``Our attorney proceeded to pencil out the death taxes that would be 
due after my mother's death and we all sat in total shock. It had taken 
my grandfather and his father their entire lifetimes to build up this 
ranch. And now we cannot continue on and the grandchildren will not 
have the land and the rich heritage that it provided.

                              {time}  2230

  ``It has been 3\1/2\ years since my dad's accident, and we still 
don't know what we are going to do. We only know that we will not be 
able to keep the ranch unless something is done with the estate tax law 
now.
  ``The estimated estate tax on our family ranching assets is $3.3 
million. We gross, not net, approximately $350,000 per year from the 
cattle. Without the land being paid for and tight

[[Page H6593]]

operating costs, we would not be able to make money from the business. 
Currently what we are trying to do is sell off one of our spring ranges 
in order to buy a million-dollar life insurance policy for our 
mother.'' So they are going to have to sell a part of the ranch to buy 
a life insurance policy on their mother so that perhaps it can allow 
them to pay off one-third of the estate taxes and avoid a fire sale.
  ``My mother does not have a husband anymore. She worked hard all her 
life and gave up a lot of material things to make this ranch operate. 
Now unless this estate tax law is changed or abolished, she will have 
to leave her home, the home she loves and our family will not have a 
base from which to carry on.
  ``This same scenario is happening to a lot of ranchers in our 
valley.'' It is not just happening to the Fords and the Carnegies and 
the wealthiest people of this country. It is happening to a lot of 
people in this country. It is happening and impacting heritage. It is 
impacting a lot of small businesses and it is impacting the American 
dream to be able to do something for the next generation.
  Remember the statement that I made earlier? Why is it that this 
government discourages instead of encourages the continuation of these 
type of ranches or businesses? This letter goes on. Let me conclude the 
statement.
  ``I urge you to ask yourselves why does this tax exist? Is it worth 
the great harm it caused to my family and many others? If it is not 
worth the harm, then shouldn't the tax be eliminated? I hope you will 
remember our family when you consider this.''
  Let me say in conclusion of these remarks this evening, do not think 
as you hear from team number two that is encouraging the continuation 
of the death tax, do not pay heed to the President and the Vice 
President's policy that says we should increase the estate tax, the 
death tax. What you should pay attention to are the 65 Democrats and 
the entire Republican body that says, This death tax is not fair. It is 
not justified. It is on property that has already been taxed. And it is 
devastating some of our communities for the simple reason that a death 
occurred. We are only taking 2 percent of the surplus to eliminate the 
marriage penalty and to eliminate the death tax.
  I urge every one of my colleagues, and I am telling you, 65 of the 
Democrats have already joined team number one. The Republicans are on 
team number one. I urge the balance of my colleagues, stand up and say 
no to this death tax. If you think, for example, it only happens to the 
wealthy, go home this weekend, go out to the small businesses and the 
farms and ask them.
  Just one final concluding remark, and, that is, remember the sentence 
in the letter I just read, and, that is, Mr. Speaker, should we not be 
encouraging rather than discouraging the continuation of these ranches 
and these small businesses? Of course we should. We have an obligation 
to do so.

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