[Congressional Record Volume 148, Number 72 (Wednesday, June 5, 2002)]
[House]
[Pages H3206-H3207]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      PERMANENT ESTATE TAX REPEAL

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, tomorrow the House of Representatives will 
consider a proposal by the Republican majority to permanently repeal 
the estate tax.
  Now, we had a vigorous debate over the estate tax last year; and I 
along with many others supported a reform of the estate tax that would 
lead to the exemption of 99\1/2\ percent of the estates in the United 
States of America. But to take and permanently repeal the tax as will 
be proposed tomorrow for the largest estates will be an extraordinarily 
expensive measure and add dramatically to the deficit of the United 
States and ultimately undermine the Social Security trust fund of the 
United States.
  Permanent repeal would cost $740 billion, B, billion dollars, over 
the next decade after 2012. But if we were to instead say, well, let us 
exempt the first $5 million of everybody's estate, now that seems like 
a pretty reasonable step. We do not want people, for instance, in my 
district or in Oregon who own forestry, tree farms, to go out and 
prematurely harvest the trees so they have to pay their estates taxes. 
We do not want people to have to break up their small businesses so 
they can pay their estates taxes. Those things are well and good. We 
could do that. We could easily do that.
  The current law will exempt by the year 2009 the first $3.5 million 
of each estate. So let us just round that up to $5 million. So if we 
did that, that would reserve $400 billion in taxes or $400 billion of 
money that would not be drained from the Social Security trust fund to 
help pay for the retirement of the baby boom.
  Now, it is true that there would be some 4 or 500 estates a year 
worth more than $5 million who would have to pay taxes to support the 
53 million people on Social Security.

                              {time}  1645

  I believe that they can afford that burden. Some say, well, we know 
they should not pay taxes twice. Well, guess what, most of them will 
not pay taxes twice. In fact, the way the current laws are set up, many 
of these estates have unrealized capital gains, and if those estates 
are exempt from taxation, not even the lower rate of capital gains will 
be paid.
  The American working people have to pay day in, day out a substantial 
portion of their income to Social Security, day in, day out a 
substantial portion of their income in income taxes, but these people 
with the estates worth more than $5 million would never, ever pay a 
penny in taxes. The unrealized capital gains would be rolled over into 
the estates, the estates would be tax-exempt, all at a cost of $400 
billion to the rest of the United States of America, the rest of the 
taxpayers in this country.
  This is not fair. It is not fiscally prudent, and the Republican 
majority should be ashamed of pushing this through at this time of 
financial crisis. We are looking at a $300 billion deficit this year. 
The Social Security lock box that they had us vote on seven times, 
which I voted for seven times, has been busted open and depleted. There 
is nothing, nothing going into it over the next 10 years, and for the 
next 10 years

[[Page H3207]]

after that; if they permanently repeal the estate tax for estates worth 
more than $5 million, in fact, the Social Security trust fund will 
continue to be drained.
  So we will threaten the benefit of 53 million Americans' Social 
Security benefits to benefit a handful of extraordinarily wealthy 
families. This is not the America that I know and I love.
  The estate tax was put in place nearly a century ago by a Republican 
president because the accumulation of wealth generation to generation 
was creating extraordinary disparities in our society, and the idea 
was, well, those people should help carry a little bit more of the 
burden, but if this becomes law, if they are successful tomorrow, as I 
suspect they might be, then many of these estates, many of these 
families will never, ever contribute to the collective burdens of 
citizenship in the United States, much as many corporations are now 
setting up phony overseas offices in Bermuda and Luxembourg to avoid 
paying taxes on overseas or U.S. earnings.
  We will ultimately, if they are successful, be a country where only 
wage-earning Americans pay taxes and those that live off the 
accumulated wealth of their predecessors and the largest corporations 
will not contribute a penny. This is not right, and my colleagues 
should vote against this legislation tomorrow for fiscal prudence and 
for fairness.

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