[Congressional Record Volume 151, Number 42 (Tuesday, April 12, 2005)]
[Extensions of Remarks]
[Page E624]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             INTRODUCTION OF ESTATE TAX RELIEF LEGISLATION

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                           HON. DENNIS MOORE

                               of kansas

                    in the house of representatives

                        Tuesday, April 12, 2005

  Mr. MOORE of Kansas. Mr. Speaker, I rise today to introduce 
legislation that would repeal the estate tax for 99.7% of all estates 
in our country.
  During my time in Congress, I have strongly supported estate tax 
relief for American families, farmers, and small businesses, and 
continue to support the ability of one generation to transfer a 
business and assets to the next generation. During my first term in 
Congress I voted to override then-President Clinton's veto of a measure 
that repealed the estate tax, and later voted for President Bush's 2001 
tax cut package, which included a phase-out and temporary repeal of the 
estate tax.
  Unfortunately, however, our country's fiscal situation has changed 
dramatically over the last several years, and while I continue to 
support estate tax relief, I also continue to support fiscally 
responsible policies that will not transfer trillions of dollars in 
debt to future generations. On February 17, 2004, the national debt of 
the United States exceeded $7 trillion for the first time in our 
country's history. One year later, our national debt is $7.8 trillion. 
In the past year alone, our country has added $800 billion to our 
national debt. The ``debt tax'' that we are imposing on our children 
and grandchildren cannot be repealed, and can only be reduced if we 
take responsible steps now to improve our fiscal situation.
  This week the House is scheduled to consider a full repeal of the 
estate tax. Repeal of the estate tax will cost approximately $290 
billion over just the next ten years, and although I support full 
repeal in theory, the sad truth is that our country cannot afford the 
luxury of an estate tax repeal at this time.
  My legislation would provide immediate relief by raising the amount 
of an estate exempt from any estate tax liability from $1.5 million to 
$3.5 million. Additionally, the exemption for married couples would 
rise to $7 million under my bill. I believe this measure strikes an 
appropriate balance between the enormous cost of full repeal and 
the unacceptable cost of doing nothing. 99.7 percent of the estates in 
our country would face no estate tax liability at all under this 
legislation.

  Further, H.R. 8, the estate tax repeal bill that the House will 
consider in the near future, would preserve the reinstitution of 
carryover basis rules that are contained in the 2001 tax law. Replacing 
the step-up in basis that currently exists with the carryover basis 
rules that used to exist in our tax code, and will temporarily reappear 
in 2010, would impose a very real, very significant compliance burden, 
and capital gains tax increase, on approximately 71,000 estates every 
year. By repealing the step-up in cost basis, which allows heirs to 
value an inherited asset at the market value of that asset on the date 
of a benefactor's death, H.R. 8 would force individuals and families to 
determine the price of a transferred asset at the date at which the 
asset was originally purchased. This means that a piece of property 
originally purchased several decades ago for $25,000 and sold for 
$325,000 today would be subject to a taxable capital gain of $300,000. 
Taxable gains on transferred property are particularly burdensome in 
light of the unprecedented real estate boom our country has experienced 
over the last several years. My legislation would preserve the step-up 
in basis and thereby provide substantial capital gains tax relief to 
thousands of American families.
  Full repeal of the estate tax may still be an option for future 
Congresses to consider, but until we are able to improve the fiscal 
situation of our country, Congress should attempt to strike a balance 
between total repeal and the status quo, which will significantly 
increase the estate tax burden in 2011. We need to ensure that the 
federal government is preparing adequately for the unprecedented 
demographic shift that will strain Social Security and Medicare in the 
decades to come. Spending nearly $300 billion over the next ten years 
on full repeal of the estate tax poses a genuine threat to Social 
Security and Medicare and will impose an unnecessary burden on our 
children and grandchildren, who will be forced to pay back with 
interest the debt we are accumulating today.

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