[Congressional Record Volume 146, Number 114 (Friday, September 22, 2000)]
[Senate]
[Pages S9035-S9036]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN:
  S. 3098. A bill to amend the Internal Revenue Code of 1986 to phase 
in a full estate tax deduction for family-owned business interests; to 
the Committee on Finance.


        estate tax deduction for family-owned business interests

  Mr. DORGAN. Mr. President, one of the things Americans like least 
about Congress is the way we wrangle over things we don't agree about 
instead of acting on things we can agree about.
  The estate tax is a case in point. There is wide agreement in the 
Senate that we should act to eliminate the burden of the estate tax on 
family farms and businesses. We could accomplish that this year--this 
week in fact--with little fuss or ado.
  I propose that we do just that, and save for later the parts of the 
estate tax that we don't agree on. We should not hold the family farms 
and businesses of this nation hostage to the heirs of multi-billion-
dollar investment fortunes. We can address that problem right now so 
let's do it.
  We often forget in this country that a family is an economic unit as 
well as a social unit. This nation was built upon an economy of family-
based farms and businesses. That is why the values of family--a 
commitment to community, a loyalty to place, a sense of tradition 
passing through the generations--were an important part of the economy 
in the formative days of our republic.
  Those values weakened as the economy became national and corporate. 
They have weakened further still as the economy has become global, and 
the cold calculus of the global marketplace has displaced 
considerations of family and community in our economic life.
  In this setting it is crucial that we strive to keep the family farms 
and businesses that we have, and to encourage new ones. Family-based 
enterprise

[[Page S9036]]

provides a counterweight to the centrifugal forces of the global 
economy. It can help to anchor the market in values and concerns that 
the large impersonal corporation does not share, and we should 
encourage this form of enterprise whenever we can.
  Certainly the Federal Government never should force the sale of such 
an enterprise just to pay an estate tax. That does not happen often 
today. But not often is still too often. It should never happen, and 
that is why I am introducing a bill today to make sure it doesn't.
  Under this bill, the estate tax on farms and businesses under active 
family management would phase out over 6 years, until by 2006 it would 
be gone completely.
  This bill is different from the one that passed this Chamber earlier 
this year in one key respect: It applies onto family farms and 
businesses passed along to the next generation. It does not apply to 
the heirs of multi-billion dollar investment fortunes and the like. 
There was a strange disconnect in the debate over that earlier bill. 
Virtually all the talk from proponents was about family farms and 
businesses. Yet the bulk of the actual belief of their bill would have 
gone to the heirs of investment fortunes instead.
  That is why many of us voted against the bill. The walk didn't match 
the talk. And that is why I am proposing today that, for once, we move 
forward on what we do agree on instead of wrangling continuously, for 
political advantage, over what we don't. Large stock fortunes are not 
the same as family farms and businesses. They raise a different set of 
questions where the estate tax is concerned, and we ought to deal with 
those questions separately and at a later time.
  This is not the place to debate the merits of the estate tax as it 
applies to large fortunes as opposed to operating farms and businesses. 
I will just note briefly a few of the reasons why many of us could not 
support the previous bill.
  For one thing, the tax was enacted out of the conviction that those 
who have benefited most from our democracy in the past ought to 
contribute to its security and well-being in the future. That was true 
back in 1916 and it is equally true today. To repeal the estate tax 
completely would shift the burden of paying for the Federal Government 
even more onto the working men and women of this country. That is not 
fair.
  Second, the estate tax encourages people with large fortunes to make 
significant contributions to charity. If we are going to rely less on 
government in addressing our social problems, and more on the efforts 
of individuals and private nonprofit organizations, then we must not 
dry up a prime source of funding for these efforts.
  Third, the estate tax encourages the work ethic, as it applies to 
estates other than family-based farms and businesses. Those who might 
otherwise be able to live on inherited fortunes occasionally have to 
some useful work instead.
  I know that there is disagreement on these points. They deserve an 
honest debate. But as I said, we should not hold family based farms and 
businesses hostage to that debate. We can agree that help for these 
family based enterprises is the first priority of estate tax reform. We 
can agree that no family farm or family business should have to be sold 
to pay an estate tax.
  So let's do that now and save the rest for another day.
                                 ______