[Congressional Record Volume 151, Number 43 (Wednesday, April 13, 2005)]
[House]
[Pages H1921-H1943]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEATH TAX REPEAL PERMANENCY ACT OF 2005
Mr. HULSHOF. Mr. Speaker, pursuant to House Resolution 202, I call up
the bill (H.R. 8) to make the repeal of the estate tax permanent, and
ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 202, the bill
is considered read.
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 Repeal Permanency
Act of 2005''.
SEC. 2. ESTATE TAX REPEAL MADE PERMANENT.
Section 901 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 shall not apply to title V of such
Act.
The SPEAKER pro tempore. After 1 hour of debate on the bill, it shall
be in order to consider the amendment in the nature of a substitute
printed in House Report 109-35, if offered by the gentleman from North
Dakota (Mr. Pomeroy) or his designee, which shall be considered read,
shall be debatable for 1 hour, equally divided and controlled by the
proponent and an opponent.
The gentleman from Missouri (Mr. Hulshof) and the gentleman from
California (Mr. Stark) each will control 30 minutes of debate on the
bill.
The Chair recognizes the gentleman from Missouri (Mr. Hulshof).
General Leave
Mr. HULSHOF. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within
[[Page H1922]]
which to revise and extend their remarks and include extraneous
material on H.R. 8.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. HULSHOF. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, I appreciate the fact that we are here today poised to
pass H.R. 8, the Death Tax Repeal Permanency Act of 2005.
On behalf of the lead Democratic sponsor, my colleague, the gentleman
from Alabama (Mr. Cramer), as well as the over 200 bipartisan Members
who have co-sponsored this bill, I am pleased that we are poised to
pass in this body this commonsense legislation.
I would like to talk about a couple of constituents, particularly a
constituent named Howard Effert who is a resident of Columbia,
Missouri, who in 1965 began a lumber yard business there in Columbia.
He contributed $100, which was a very modest contribution, as he had
three young children to provide for with a modest wage.
He had the idea and a desire for a new venture even though many
within the community felt this venture would be unsuccessful, but yet
his partners helped him provide the financial assistance and of course
some valuable mentoring to help him open the doors to this lumber
business.
Fast forward now 40 years. His two sons, Brad and Greg, are running
the day-to-day operations of the business. Of course, they want this
family business that has been in their family since its modest
beginnings in 1965 to be able to be passed on pursuant to the American
Dream, that is, to create a legacy, to help your children be better off
than you were.
Yet the Effert family today, Mr. Speaker, has to write a check for
$1,000 a week, $52,036 to be precise, to purchase a term life insurance
policy, the proceeds of which will be to pay the Federal Government on
that inevitable day that Howard Effert passes from this world to the
next.
In 2001 we passed historic legislation that let all income tax payers
keep a little bit more of what they earned, and this historic
legislation included a repeal of the Federal death tax which was a top
tax priority for a lot of small business and family farm groups. Thus
under current law, the death tax is gradually phased out between now
and 2010. This is accomplished by increasing the exemption from the
tax. Currently it is $1.5 million shielded from this very confiscatory
tax, and at the same time we chip away at that top rate, which was as
high as 55 percent, and in fact, in a few isolated instances as high as
60 percent tax. We now chip that away, and it is currently 47 percent.
Unfortunately, as we know, the death tax does not stay dead and
buried. As things now stand, it will rise from the grave in 2011, and
it will revert to its form prior to 2001. Now, this quirk in the law
can be directly attributed to the Senate's Byrd Rule, which applies to
the consideration of reconciliation bills.
As a matter of basic fairness, we must permanently repeal the death
tax. The death of a family member quite simply should not be a taxable
event. And if it was good policy when we enacted it in 2001, it remains
a good idea today.
Let me touch briefly on some policy rationales for finishing this
unfinished work. The death tax is fundamentally unfair. By its very
structure, the tax punishes thrift, savings, and hard work. Conversely,
the tax forces taxpayers to engage in a host of economically
inefficient activities to avoid the very punitive nature of the tax.
Not only does this have a very real effect on taxpayers and their
behavior but a negative impact on the economy.
With a tax like the death tax, a family business or farm has no
choice but to divert these precious resources, as in the case of the
Effert family, to plan financially for the financial impact for the
tax: money that could be used to expand the business, to purchase a
forklift, to bring another person on the payroll, whatever is in the
best interest of that business. Instead, this money is diverted in
anticipation of this very punitive tax.
Now, supporters of retaining the death tax will claim that perhaps
redistribution of income promotes economic fairness and social
responsibility. We will get to have that debate. I respectfully
disagree. Instead of rewarding savings and investment, this tax
actually rewards those who spend lavishly and leave no ongoing business
interest or assets to the next generation.
I am mindful of the bumper sticker that I saw recently traveling
Missouri's highways on a big recreational vehicle that says ``I am
spending my children's inheritance.''
If you wanted to give some good estate tax advice to someone that has
put together some assets to pass along, it would be simply to consume
it. Yet as we talk about some sort of tax reform and perhaps a
consumption tax, this tax actually focuses on non-consumption and on
thrift and savings.
For that and for a variety of reasons, we will have the opportunity,
I hope, in a good debate, in a civil discourse. I think we should
permanently repeal the death tax. We should enact H.R. 8.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I guess it becomes my job to point out that the
Republicans are at it again. Another huge tax cut or break for the less
than 1 percent of the richest Americans while they turn their back and
cut Medicaid, refuse to recognize that Social Security is not in crisis
but needs some adjustment, cut Head Start, cut programs for housing,
cut programs for the environment, fail to provide the promised benefits
to our 140,000 servicemen in Iraq, turn their back on all that is
American to give a few dollars to the very richest of Americans.
Now, not all Republicans are that way. I find that many of the
Republicans who have actually worked for a living at some point in
their lives, and not just either inherited money or been at the trough
of the government, actually oppose this bill. Warren Buffett, the Gates
family, people who have done quite well think that as I do it is a
stupid bill and will do nothing for our free enterprise system. It will
stifle creativity and leave us with a system where merit and ability
mean nothing and heredity means everything.
$300 billion over the next 10 years and perhaps another $700 billion
over the decade following that are going to be frittered away to a very
small number of Americans. With that we could end this talk about
privatizing Social Security that President Bush is leading, and we
could start shoring up the trust fund. We could get rid of the doughnut
hole in the poorly constructed Medicare drug benefit. We could fulfill
the promise that the President and the Republicans have ignored for
funding No Child Left Behind. We could eliminate the proposed cuts to
Medicaid which will hurt the poorest children in this country. And
while we may help a few very rich children with an inheritance, we will
cut hundreds of thousands of children's Medicaid benefits. That could
be prevented.
We could cover a large portion of the 45 million people who are
without health insurance, I might add 8 million more than when
President Bush took office. But Republicans obviously do not care about
Social Security or Medicare or the uninsured or education or the
children. They only care about tax cuts for the very richest among us.
Now, if you eliminate this, you are only going to help probably less
than a couple thousand people a year, and they will arguably have by
2009 estates of over $7 million. Until now there has not been a family
farmer or a small business who has been unable to pass the business on
to the next generation.
I might add to my friend from Missouri of his people in the lumber
business, if their children cannot get the first $7 million handed to
them and then get a 50 percent down payment on the balance of the
business and be given 10 years at less than 6 percent to pay off the
balance of that, they are probably too dumb and would lose the business
in no time at all anyway.
{time} 1430
So what the current law allows is so generous, and there have been
absolutely no instances, not one, of a family farmer or family business
being lost, decimated or put on the auction block because of the estate
tax.
In fact, 99.7 percent of all estates would be exempt from the estate
tax if
[[Page H1923]]
we just extend the tax as it applies in 2009. They cannot show that it
harms people. They can only show that gives billions, $300 to almost $1
trillion over 20 years, to the very smallest, most select group of rich
people in this country.
It is indeed a follow on of the Republican mantra, give money to the
rich, give it to them in huge amounts and cut back on education, cut
back on health care, do not help the environment, cut back on support
for our troops and cut back on improving America's infrastructure, all
in the name of helping the few rich who may be contributors to the
Republican party.
I urge that my colleagues vote ``no'' on the final bill. I urge that
my colleagues vote for the gentleman from North Dakota's (Mr. Pomeroy)
who will offer a responsible substitute, which will at least keep the
$300 billion from being squandered, and it will prevent this bill,
which does nothing to help hardworking Americans or small businesses,
and I hope we can bring some sanity back to the financial code and to
the economic future of this country by not passing this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, a lot of individuals have worked on H.R. 8,
and I yield 2 minutes to the gentleman from California (Mr. Herger),
one of those individuals.
Mr. HERGER. Mr. Speaker, I thank the gentleman very much for the
time.
Mr. Speaker, I rise in strong support of legislation to bury the
destructive death tax once and for all; and I might mention that my
personal experiences, even with my own family and others, has been just
the opposite of the gentleman who just spoke before.
Nearly everywhere I go throughout my largely rural, agricultural
district in northern California, I hear from businessmen and
businesswomen and many farmers and ranchers who have had to liquidate
and sell a family business or farm just to pay the Federal estate tax.
This is simply wrong.
Four years ago, I joined with President Bush and a majority of
Representatives and Senators in an effort to enact into law historic
tax relief legislation, including repeal of the death tax.
Unfortunately, due to outdated Senate budget rules, the 2001 tax law
will sunset on December 31, 2010. This has created an incredibly unfair
and arbitrary situation.
Consider that the heirs of those who pass away in 2010 will face no
death tax whatsoever, while those whose families are unfortunate enough
to pass away in 2011 or thereafter will face tax rates of up to 55
percent on their assets, forcing many of them to have to sell.
Certainly no one can reasonably argue that this is rational tax policy.
Furthermore, the death tax extracts a high cost from American
taxpayers. Studies have found that family businesses spend up to
$125,000 on attorneys, accountants and financial experts to assist in
estate planning. These dollars could otherwise be used to modernize
equipment, expand their business or farms and create new jobs.
Mr. Speaker, the death tax is, without question, one of the most
destructive, counterproductive and unfair provisions of our Tax Code.
Let us bury the death tax once and for all. Vote ``aye'' on this
legislation.
Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentleman from
Michigan (Mr. Levin).
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Mr. Speaker, in a few words, this is fiscal madness. It is
a death wish on the part of some of my colleagues about fiscal
responsibility. What my colleagues are burying is fiscal
responsibility.
The national debt is now $4.6 trillion, $6.3 if we add in Social
Security funds. As mentioned, this bill would add $290 billion in debt,
and who would benefit? The very, very wealthy.
One-third of the estate tax is paid by the wealthiest one of one
thousand Americans. I think that is one-tenth of 1 percent. Not farmers
or small business people. That is the lamest argument brought to this
floor in recent memory.
The Pomeroy amendment would totally take care of this, and what my
majority colleagues' bill does, and it is interesting, they do not come
here and say so, they would increase the taxes for thousands and
thousands of Americans. These citizens would have to pay capital gains
tax when they do not now do so. Why do my colleagues not come here and
say this is a tax increase for thousands of Americans? They do not say
that.
What this is also, everybody should understand, is a further raid on
Social Security funds. My colleagues have come here, some of them on
the majority side, talking about Social Security and how we need to
address the shortfall. For some of these same colleagues, private
accounts do not even touch that, and then they come here and increase
the shortfall.
This is true fiscal madness. My colleagues will indulge in it again I
guess, and I hope, once again, the Senate will come to our rescue.
Mr. HULSHOF. Mr. Speaker, I yield myself 30 seconds.
I am sure the gentleman from Michigan misspoke, and I am certain it
was inadvertent. The bill, H.R. 8, actually does allow for a step up in
basis of $3 million for a surviving spouse and another $1.3 million for
surviving heirs.
If the intent of the legislation, which it is, is to help family
businesses be passed from one generation to the next and the surviving
heirs choose not to farm or continue the family business, then they are
the ones making the taxable decision to dispose of assets that would be
subject to a 15 percent capital gains rate but certainly not the 45
percent estate tax.
Mr. Speaker, I yield 1 minute to the gentleman from Florida (Mr.
Shaw).
Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this
time.
Listening to the debate that we have listened to from the other side,
the sole argument seems to be that it only applies to a small amount of
our population, the wealthiest among us. We know that, but I have yet
to hear anybody to justify, to give us a good reason to say this is a
good and fair tax and here is why.
It seems to be that the argument is being centered around the
punitive basis. Let us go after the rich guys. Let us go after them and
do something.
I am in favor of the Hulshof bill to repeal the death tax simply
because it is the right thing to do. The death tax is wrong. To go in
and tax almost half of someone's estate because they have accumulated a
lot and to make death an incident of taxation is wrong. It is a wrong
tax, and I cannot imagine anybody getting up and justifying it, other
than the fact it is a revenue stream to the Federal Government, but it
is the wrong one.
Mr. STARK. Mr. Speaker, I yield myself enough time to remind the
historians here that it was the Republicans in the 1800s who
established the original inheritance tax to prevent a nobility class
from forming, an idle nobility class, in this country.
Mr. Speaker, I am happy to yield 4 minutes to the gentleman from
Washington (Mr. McDermott).
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, my colleague from Florida, I wish he
would stay, because we are here today because the Republican majority
would like to repeal the estate tax, but they have forgotten history.
I am sure my colleague was not here, but I would like to remind him
that it was a Republican, President Roosevelt, Teddy Roosevelt, who
strongly supported an estate tax in the first place. Here is what he
said. There is no argument for this.
``The man of great wealth,'' Teddy said, ``owes a particular
obligation to the State because he derives special advantages from the
mere existence of government.'' Wow, nicely said, and a Republican,
too.
That proves two things, that Republicans can sometimes speak
eloquently, and sometimes they can even do something that is right.
Though Republicans want to undo all the good for the sake of greed,
please, America, do not be phonied up by this rhetoric that we hear on
this bill. They will pitch some gibberish about how they are helping
Americans. That is nonsense.
We just came from the Committee on Ways and Means. The reason this
place was in recess is because we were over there giving out $8 billion
to oil companies. Those poor people, whose profits have quadrupled in
the last 2 years,
[[Page H1924]]
that is what we did a little while ago. Now we come over here, and we
are going to give more money away. Does that seem like it benefits real
people? This is not about real people. This is about very, very, very
rich people, and that is about as plainspoken as Teddy Roosevelt would
have said it.
Only 2 percent, at the most, pay any estate tax whatsoever. Three-
quarters of the money that comes in comes from people with estates over
$2.5 million.
If we repeal this, the rich get richer and America's deficit gets
deeper and redder. We create an oligarchic class in this country from
whom the money can never be taxed. If they can manipulate it around
while they are alive, they can never have to pay a penny.
The real losers in this are not only the American people. It is the
American universities, the American churches, all those people who get
money contributed by rich people because they do not want to pay the
inheritance tax.
Now my colleagues have taken away the encouragement. Why should they
give anything away? Oh, well, because they have big hearts. They have
big hearts we are told. Really? Then why are we out here with a bill
like this which gives them the ability to keep every single dime?
Now if you can give your kid $2 million and say, now, Johnny, here is
two million bucks, I think that ought to kind of get you a start in the
world. Does that not seem like enough? Well, to the Republicans, there
is never enough; take as much as you can from everybody and keep it.
Ronald Reagan put the sign of the cross on it. He said, are you
better off today than you were 4 years ago? Never does anyone say on my
colleagues' side, are we better off.
We are in debt to the world. We borrowed from the Japanese last year
our entire deficit, more than $400 billion, and the President wanders
around the country saying, well, that is just paper. Those things in
the Social Security trust fund, that is just paper. Do not pay any
attention to that.
If the Japanese stop buying dollars and they start buying Euros, and
the Chinese start buying Euros and the Middle East buys Euros, where do
my colleagues think we are going to borrow money and what kind of
interest rate are we going to pay? This is a bad bill, it is bad
policy, and it is bad ethics.
Mr. HULSHOF. Mr. Speaker, I am pleased to yield 3 minutes to the
gentleman from the great State of Missouri (Mr. Blunt) a colleague of
mine, the majority whip.
Mr. BLUNT. Mr. Speaker, I thank my good friend, the gentleman from
Missouri (Mr. Hulshof), for yielding to me and for the great work he
has done on this issue from the day we came to Congress 8 years ago. I
rise in support of the bill that would repeal this tax.
The House and Senate are already both on record for repealing the
tax. We just did not repeal it permanently.
{time} 1445
By not repealing the tax permanently, we created an incredible
situation for those people who would have an estate that was not
taxable at all in 2010, but is highly taxable in 2011. The alternatives
that the other side of the aisle have discovered during the hard work
to achieve the goal of this bill are certainly a long way from where
they were a few years ago. In fact, we have all heard about the impact
on small businesses and family farms, but it bears repeating as we
consider this legislation today.
More than 70 percent of family businesses do not survive the second
generation, and 87 percent do not make it to the third generation
because of the estate tax. The idea that you give your son $2 million
overlooks the vast numbers of family members in this country who
actually are working side by side with their son or daughter. It is
hard to tell who made the money and who did not, but on the day that
the original member of the family passes away, suddenly the side-by-
side partner has a big problem.
Family farms and businesses are among the hardest hit. In fact, $2
million is quite a bit below the alternative that the gentleman will
vote for and suggests that amount somehow would be okay to give in his
vote, but not okay to give in his speech. Add in the value of farm
equipment and business inventory, suddenly there is a lot more money
than you thought you could accumulate.
When we started this debate a few years ago, I saw some statistics
that the highest percentage of estates paying at that time were estates
that were only slightly above the estate tax amount, but I am sure none
of the principals involved had any idea that they had accumulated over
their lifetime an estate that would be taxed as a taxable estate.
On Friday of this week, I am going to visit with Mark and Kim Larson
who own a family farm right outside of Joplin in my district. Mark
tells me he and his family spend a lot of money, money which would
otherwise go into continuing to grow their family business, simply
trying to comply with a Tax Code that says if somebody dies in 2010,
your family deals with one set of circumstances; but if they die the
next year, you are impacted by the return of the death tax.
Medium-to-large farms like the Larsons' produce more than 80 percent
of agricultural products in America. Let us put some certainty in the
future for those kinds of families. Let us do the right thing and
abolish this tax that penalizes savings and hard work.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Maryland (Mr. Cardin).
Mr. CARDIN. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, I hope we will reject this bill. Let me give two reasons
why: first, the cost. We talk about being fiscally responsible, we talk
about trying to balance the Federal budget and say we have a problem
with Social Security as far as long-term solvency of 75 years; but let
me point out that the revenue loss of this bill equals the 75-year
amount to provide long-term solvency for Social Security.
What we do here is make choices. If we have a choice to provide for
the long-term strength of Social Security or the passage of this bill,
my vote is for the long-term solvency of Social Security.
The second issue I would like to point out is the predictability of
the current estate tax situation. It is not very predictable, and the
passage of this bill will do nothing to assure people when they do
their estate plans that they can rely upon the schedule Congress has
passed.
We have a chance with the Pomeroy substitute to bring certainty to
estate taxes with a reasonable exemption of $3.5 million, $7 million
per couple, and reducing permanently the tax by 10 percent. That is
what people want when they do their estate planning. They want
predictability.
So if Members are fiscal conservatives and are concerned about the
cost of this bill on our children and seniors and if Members want
predictability in the estate tax, this legislation does not give it to
us. This legislation should be rejected, and we should pass a bill that
provides certainty with the estate tax. We will have that opportunity
with the fiscally responsible substitute so we can deal with the budget
problems of this country.
We are borrowing way too much money for our children and
grandchildren. They deserve better than that. They deserve a Congress
that will be fiscally responsible, and the passage of this bill just
does not do it. I urge my colleagues to reject this legislation.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, among the many groups that support H.R. 8, including the
National Federation of Independent Business, which is the voice of
small business, there are many minority owners of small businesses that
also support complete repeal.
Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr.
Bishop).
Mr. BISHOP of Georgia. Mr. Speaker, I rise today to recognize the
hard-working people of America who play by the rules and have paid
their fair share. Decent, law-abiding, tax-paying Americans are the
backbone of this country, and they are the salt of the Earth. They are
the farmers of southwest Georgia and the family business owners who
provide the jobs that keep small rural communities alive and
flourishing.
All across this land are Americans who have paid their taxes all
their lives, only to face a final taxing event at death. They paid
their taxes during
[[Page H1925]]
their lifetimes and should not be charged again when they die.
The death tax represents all that is unfair and unjust about the tax
structure in America because it undermines the life work and the life
savings of Americans who want only to pass on to their children and
grandchildren the fruits of their labor and the realization of their
American Dream.
In my State of Georgia, farmers, many of whom are widow women, are
faced with losing their family farms because of this death tax.
Employees of family businesses, many of whom are minorities, are at
risk of losing their jobs because their employers are forced to pay the
unfair and exorbitant death taxes levied on them. Funeral homes, weekly
newspaper publishers, radio station owners, local dry cleaners, all are
affected all across the demographic spectrum.
Mr. Speaker, although reasonable minds may differ on this issue, I
believe that the death tax is politically misguided, morally
unjustifiable, and downright un-American. Let us vote today to finally
eliminate the death tax and return to the American people and their
progeny the hard-earned fruits of their labor.
Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentleman from
Massachusetts (Mr. Neal).
(Mr. NEAL of Massachusetts asked and was given permission to revise
and extend his remarks.)
Mr. NEAL of Massachusetts. Mr. Speaker, I thank the gentleman from
California (Mr. Stark) for yielding me this time.
Mr. Speaker, the gentleman from Florida said I want Members to give
me a good reason why we should not repeal the estate tax. Let me give
Members two good reasons: Afghanistan and Iraq.
The idea that we would be borrowing the money to pay for Afghanistan
and Iraq when by just leaving this tax in place we could pay for those
incursions and maybe get the Humvees to those men and women who are
defending us every single day, or maybe get bulletproof vests to them
on time, borrowing the money.
The slogan of the moderate Republican Party is this: we are rich, and
we are not going to take it any more. It is day after day in this
institution, borrow money, run up the debt, run up the deficits and
then with a straight face say, we are going to repeal a tax that
affects 1 percent of the American people, just 1 percent of the
American people.
They talk about industriousness and thrift and the work ethic. We see
what happens to this money when it gets to the fourth and fifth
generation of the same family: thrift is gone, the work ethic is gone.
They quarrel about who is going to have enough money so they can enjoy
the lavish ways of American life.
When I hear people say, as they have said recently in this debate,
well it is going to take care of the family farmer, they cannot find a
farmer that is not taken care of in the legislation that is about to be
proposed here. This legislation that they are proposing today cuts
against the grain of what Thomas Payne reminded us in ``Common Sense.''
He was concerned about hereditary power, the idea that the same people
would control the wealth of America with the same families that would
get to go to the same schools so the same families would have the same
doctors and lawyers and accountants so the rest of America might not
have a chance to participate. Whatever happened to the Republican Party
in America.
Teddy Roosevelt said this was about thrift and hard work and honesty;
they were blessed to be born in this country. That is what patriotism
is. When we look at who enjoys the fruits of this money, the smallest
number of American people, again the top 1 percent in America.
Inherited wealth, that is not what America is based upon. We do not
live in an aristocracy. Look what happened to Europe and the way they
lag behind as they do. There is no sense in the House of Lords that you
can advance yourself. Here in this House, the people's House, every
walk of life is represented. Why do we just not establish a House of
Lords after we get rid of the estate tax so then when we get rid of
hereditary power, we will simply have the permanent state of
aristocracy and privilege for the few.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would remind the gentleman from Massachusetts (Mr.
Neal) as he mentions Iraq and Afghanistan that the budgetary impact of
H.R. 8 is really not felt until the year 2011 and beyond.
Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms.
Harris).
(Ms. HARRIS asked and was given permission to revise and extend her
remarks.)
Ms. HARRIS. Mr. Speaker, I rise in support of H.R. 8, which will
finally free America's hard-working farmers and small business owners
from the specter of the death tax.
Benjamin Franklin said: ``In this world nothing is certain but death
and taxes,'' but I doubt even the inventive Mr. Franklin imagined the
taxation of death itself.
Americans get taxed when they earn money. They get taxed again when
they spend what is left, and government pursues them beyond the grave,
devastating their relatives who must sell the family farm or liquidate
the family business just to pay the taxes.
The impact of the death tax extends far beyond the pain it inflicts
upon grieving families. The death tax distorts economic decisions on a
massive scale. It punishes thrift. It reduces savings and investment,
and it diverts capital away from job creation to tax avoidance.
The National Federation of Independent Businesses has estimated that
the death tax will compel one-third of small business owners today to
sell some or all of their business. The Center For the Study of
Taxation found that 70 percent of all family businesses cannot survive
the second generation and 87 percent do not make the third.
All of this wasted money, energy and over 100,000 jobs lost per year
and for what, a tax that the Joint Economic Committee says costs just
as much to collect as it generates in revenue.
Mr. Speaker, the opponents of H.R. 8 cannot provide any justification
for the continued existence of this useless relic. It hurts the people
it is intended to help, and it reduces stock in our economy by $497
billion a year.
I urge my colleagues to drive the final nail in this coffin so 6
years from now Americans will not wake up to find that, like a vampire,
this unfair tax has arisen from the dead to once again suck the blood
from a lifetime of hard work and sacrifice.
Mr. STARK. Mr. Speaker, I yield 4 minutes to the gentleman from
Tennessee (Mr. Tanner).
(Mr. TANNER asked and was given permission to revise and extend his
remarks.)
Mr. TANNER. Mr. Speaker, in 1997, Jennifer Dunn, a Republican from
Washington, and I started this debate on the estate tax. At that time
the country was in much different shape financially than it is today.
At that time, we raised the issue for estate tax relief because I
thought then it was punitive. It had nothing to do with the theory that
the gentleman from Massachusetts (Mr. Neal) spoke so eloquently about,
and that is to keep 3 percent or 1 percent of the people from owning 99
percent of our country.
{time} 1500
We did not want to be like England where whoever got control of the
land and money, and 1,450 still had it 26 generations later and people
who were hardworking could not break through that ceiling because of
the nobility that was enshrined in their tax code. That is why we have
an estate tax.
But we raised that issue, and I voted for the bill that is being
proposed today, but I can no longer vote for it. Let me tell you why.
It is because, as I look in the faces of these young people, you are
looking at a House, a Senate and an administration that has embarked
since 2001 on the most radical, irresponsible financial riverboat
gamble that this country has ever seen. There has been no political
American leadership that has ever done what this group of people who
currently hold the power of government here in Washington have done to
this country.
Since April of 2001, in your name and mine, this government has
borrowed $1.2 trillion in hard money. What that means to us is that we
have transferred, at only 4 percent interest, $50
[[Page H1926]]
billion a year from programs like Social Security, like health care,
like armor for our troops, from veterans, to health care, to education,
all the things that will give the citizens of this country a chance, an
opportunity to be whatever it is their God-given talents give them, we
have transferred $50 billion a year from that to interest. And you know
what is worse? Eighty-four percent of this $1.2 trillion has been
borrowed from overseas. We are now sending more money overseas. Eighty-
four percent of this interest check is going overseas.
Let me tell you something scary. A former official of the People's
Bank of China, the country's central bank and now an economist in Hong
Kong, was recently quoted as saying that the U.S. dollar is now at the
mercy of Asian governments. Do you know what we are doing? We are
mortgaging our country to foreign interests who do not see the world as
we see it. It has got to stop, and it has got to stop sometime, and I
for one am saying I want to stop it now.
In your name, we are borrowing at the rate of $13,300 a second. This
is staggering, mind numbing. $48 million an hour. Since this debate
started, in our names we have borrowed $48 million and given the bill
to those little children sitting up there. $1 billion a day.
Do you know how much $1 billion is? If you take thousand-dollar bills
and stack them up like that, to get to a million dollars it is a foot
high; to get to a billion dollars, it is as high as the Empire State
Building; and to get to a trillion dollars, which is what has been
borrowed in the last 46 months in your name, it is a thousand times as
high as the Empire State Building, one thousand dollar bills like this.
We are facing a financial Armageddon. What we have done has created a
financial vulnerability vis-a-vis the rest of world that is every bit
as big a security interest as anything else we are going to face in the
future. I just hope that someday soon that some sense will come to this
place about how we are handling or mishandling your money.
Mr. HULSHOF. Mr. Speaker, I certainly respect my friend from
Tennessee and I trust he will bring that passion to the floor when we
have our discussion on our spending bills.
Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from
Texas (Mr. McCaul), a newly elected Member.
Mr. McCAUL of Texas. Mr. Speaker, today I rise in support of
permanently repealing the death tax. I would like to thank the
gentleman from Missouri for his leadership on this issue and his good
timing, for in 2 days the tax man cometh. As I look at these young
people in the gallery today, I say to them, this bill is about you. It
is about the youth in this country. For too long, the Federal
Government has been taxing working Americans, not once, not twice, but
three times, on their hard-earned money. When they earn it, the
government takes an income tax. When they spend it, the government
takes a sales tax. And finally, even when they die, the government
takes a tax from the grave.
In addition to being bad policy, the death tax is morally wrong. It
confiscates private property and is an unbearable cost to small
businesses, ranchers and farmers, which is precisely why the Farm
Bureau supports this bill.
I could tell you many stories about families that were forced to
borrow large sums of money or sell off or parcel out their farms or
businesses, dividing their families. I could tell you about the
Berdolls from Austin, Texas, in my district who, after paying off a 30-
year mortgage, spent 20 more years paying this unfair tax burden. They
literally paid for their farm twice.
The names may change, but the story is the same. It is time we
removed this financial burden from the backs of those pursuing the
American dream. We must guarantee that people do not have to suffer the
same hardships as the Berdolls.
I urge my colleagues to support this important measure.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. LaHood). Members should not address
persons in the gallery, and the Chair would remind all persons in the
gallery that they are here as guests of the House and that any
manifestation of approval or disapproval of proceedings or other
audible conversation is in violation of the rules.
Mr. STARK. Mr. Speaker, I yield 4 minutes to the gentleman from Texas
(Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, I rise in opposition to this latest
Republican assault on Social Security and on fiscal sanity. At a time
of apparently unending war and the largest budget deficits in American
history, our Republican colleagues are intent on solving a crisis that
does not exist.
As the President wastes millions of our taxpayer dollars
crisscrossing this country to declare that there is no Social Security
trust fund and questioning the full faith and credit of the Federal
Government, his Republican allies here seem intent on actually making
his dire and inaccurate statements a self-fulfilling prophecy. Today,
what they propose is to borrow from the Social Security trust fund and
to borrow from the Medicare trust fund in order to give more tax breaks
to the richest one-tenth of 1 percent of the people in this country.
That is borrowing from Social Security for purposes that have nothing
to do with the Social Security system because they think some rich
folks in this country do not have wallets that are fat enough. It is
taking from the hard-working employees and employers who are paying
their Social Security money and transferring that wealth over to the
richest one-tenth of 1 percent.
They call it the death tax? I think that is a good name. If they keep
pursuing bills like this, it will be the death of Social Security and
Medicare, as sure as I am standing here. Like most Democrats, I have
voted not once but a number of times to repeal the estate tax for most
Americans and to see that it is done right away, now, not postponing it
for years as the Republicans propose to do.
There is another Democratic substitute coming out today that is going
to exempt 99.7 percent of all estates from this tax, and only cover the
richest .3 percent of the wealthiest estates in this country. That
means you are not going to have a small business in East Austin or West
McAllen or a family farm in Karnes County that is covered if they are
even covered now, which the vast majority of them are not.
Why do they keep talking about family farms since it is irrelevant to
this debate? They keep talking about the guy in the pickup who is
working extra hours to try to make ends meet. They keep talking about
the little family business that with good reason wants to be able to
pass that enterprise on to the next generation of that hard-working
family.
The reason they talk about those folks is that Steve Forbes's family
is not quite as sympathetic. The family of Enrons Ken Lay, not quite as
sympathetic. They cannot defend transferring money from the Social
Security and Medicare trust fund to Ken Lay's family, to Steve Forbes's
family, to Ross Perot's family, because it is totally indefensible.
Their goal is to ensure that the richest of the rich are rewarded, as
if they have not rewarded them enough for the last few years that they
have controlled this Congress.
Social Security is not in crisis today, nor is Medicare, but if you
keep passing bills that drain $750 billion from the Treasury at the
very time more people are retiring, you will have a crisis. It was back
almost a century ago when a Republican, a fellow named Teddy Roosevelt,
said that ``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.'' It is
still inconsistent. Would that we had even one Teddy Roosevelt
Republican today to put a stop to this nonsense.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as he may consume
to the gentleman from Alabama (Mr. Cramer), my cosponsor of H.R. 8.
Mr. CRAMER. I thank my friend from Missouri for yielding me this
time.
Mr. Speaker, I think a number of important points have been made
today, but I rise today in strong support of this bill and in
opposition to the estate tax. Some of the previous speakers on this
side of the aisle have made reference to the fact that a number of us
on the Democratic side have worked
[[Page H1927]]
over this issue since actually the early nineties. I know the
gentleman's predecessor Jennifer Dunn and I and a number of people from
this side of the aisle had worked hard together to look for a
commonsense way that we could end this burden which, in my opinion, is
an extreme burden on the small business community and on the farm
community.
I do not know about the other speakers, but when I go back to my
district and I am mixing and mingling with the folks where they eat
breakfast or where they have dinner or where they gather, it is my farm
families that bring this issue up. In north Alabama where I come from,
we have some of the most productive farm families of any district in
the country. For generations, they have struggled and used tax lawyers
and tax strategies to try to find a way to effectively pass that farm
on to the next generation that we want to continue engaging in that
farm business. But they are overwhelmed by this issue.
In 2001, we did a good step, not a great step but a good step. We
passed some temporary relief. But the reality is that if we do not
permanently repeal the death tax, you have almost got to time your
death for the benefit of your family. That is outrageous. So let us
make sure that we bury this issue once and for all.
According to the Congressional Research Service, estates that
included farm or business assets represented 42.5 percent of the 30,000
plus taxable estate tax returns filed in 2003. It is not fair to say
that this is just a rich person's issue, that the estate tax only
affects the wealthy, because, according to that same Congressional
Research Service, estates over $5 million accounted for only 6.8
percent of taxable estates.
In this day and time, assets are accumulated in a different way than
they were 20 years ago, 25 years ago, 30 years ago or even more than
that. For the benefit of those farmers, for those small manufacturers,
for the local car dealers, the independent car dealers, the realtors,
the funeral directors, the grocers, the family restaurant owners, the
florists, the convenience store owners and many others, let us end this
unfair tax burden.
I urge the Members to support this.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Massachusetts (Mr. Tierney).
(Mr. TIERNEY asked and was given permission to revise and extend his
remarks.)
Mr. TIERNEY. Mr. Speaker, I rise to register my opposition to the
total repeal of the estate tax. If we want to talk about values, as so
many people did in the last couple of months leading up to this, let us
talk about the value of supporting one's family and supporting one's
community. Let us talk about the values of responsibility and fairness.
They dictate that everybody pay his or her or its corporate fair share.
Millionaires and multinational corporations benefit the most from our
taxes. We talk about what our taxes go for. There are dues that belong
to society. Eighty percent of court cases are commercial in nature.
Businesses, mostly large ones. Air traffic controllers, paid for by our
taxes, they mostly support business travel back and forth. Our Coast
Guard, our Navy protecting our shipping lanes, bridges and highways,
making products safe to go back and forth as well as people. The
Securities and Exchange Commission is our tax money trying to make
large corporations behave and treat each other well instead of cheating
each other. Sometimes it actually works.
{time} 1515
The fact of the matter is that this bill absolves the top three-
tenths of 1 percent from their responsibility to pay their fair share.
And I say the top three-tenths of 1 percent because the Democratic
alternative would exclude the first $3.5 million, or $7 million for a
couple. So much for the argument of small farms and small businesses.
They would not pay a dime on the first $7 million and only pay a
portion of anything above that.
The fact of the matter is that most of the money that is going to be
taxed on that top three-tenths of 1 percent was not earned money. That
is money they got from tax-free investments. It is money they got by
appreciation, just the value of that property increasing over time.
They did not earn it. To compensate for what these members of our
society will not be paying as their fair share, small businesses, the
people that go out and create payrolls, will have to pay more. The
families that go out and work every day for a living, they will have to
pay more than their fair share.
And all the while this is going on, we are not even paying America's
bills. This tax is going to be $290 billion off the top at a time when
our debt is larger than it has ever been. We are running annual
deficits that are at historic proportions. No family and no small
business would ever operate this way.
Mr. Speaker, let me just close by saying they are robbing us of
opportunity and prosperity and community by attacking our education and
our health, our clean water, and our clean air. All of this because
they want to give America's princes and princesses a little break at
the top three-tenths of 1 percent. Let us let everybody pay their fair
share.
Mr. HULSHOF. Mr. Speaker, I yield 2 minutes to the gentleman from
Missouri (Mr. Akin).
(Mr. AKIN asked and was given permission to revise and extend his
remarks.)
Mr. AKIN. Mr. Speaker, about 50 percent of Americans or so are
employed in small businesses, and obviously if something is employing
almost half of Americans that are working, that should be a priority.
And one can imagine my surprise the other day to find out about a guy
who drove up to a bank in an old Ford, about a 15-year-old Ford pickup
truck, with rust holes in the floor. He went into that bank and he took
out a loan for $2 million. And the head of the bank was inquiring of
the guy that is the accountant that handles our books that I have to do
as a Congressman. He said, Why in the world did this guy have to take a
$2 million loan out? And it particularly seemed out of place with this
guy with his old rusty holes in his pickup truck.
He said, His father just died and they have to pay the estate tax on
the farm.
I had heard stories like that before, but there it was right in front
of me.
So what this bill is seeking to do is to try to make it possible that
we do not destroy farms and small businesses that employ close to half
the people that have jobs in our country; and that seems to be only
reasonable. And yet I am hearing the Democrats saying over here that
they are all upset because we have already taxed a dollar the first
time the guy earns it; then we are going to tax him again on sales tax
and other things he buys, and now it is not fair to tax a dollar the
third time it comes around.
It just seems to me we do not want to destroy the businesses and
farms. What we want to do is make those jobs available, and we want to
get rid of this death tax. Just dying should not be a reason for taxes.
Mr. STARK. Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, I yield 2 minutes to the gentleman from
Ohio (Mr. Turner).
Mr. TURNER. Mr. Speaker, I am cosponsor of the Death Tax Repeal
Permanency Act of 2005 because this tax is an unfair burden on American
families. The death tax puts many small businesses, those run
predominantly by families, at a great financial disadvantage.
According to the Small Business Administration, in 2001 in the
Dayton, Ohio, metro area, which is in my district, nearly 62,000 people
worked for businesses that employ less than 20 people.
Three of my constituents, Jenell Ross; her mother, Norma; and her
brother Rob, run a small business, Ross Motor Cars in Centerville,
Ohio. When Jenell's father unexpectedly passed away in 1997, the Ross
family received a tax bill for nearly half the value of their family
business. I would like to tell their story in Jenell Ross's words. She
says, ``30 years ago my father took the chance of a lifetime.
Determined to achieve the American Dream, he invested everything he had
into Ross Motor Cars. Like a lot of people, my father thought he would
live forever.
``He didn't.
``When he died unexpectedly in 1997, the overwhelming responsibility
of keeping the family business afloat fell squarely'' to us. We could
never have
[[Page H1928]]
prepared ourselves for the shock of receiving a tax bill nearly half
the value of the dealership, where nearly 90 percent'' of the assets
were ``tied up in nonliquid assets such as inventory, equipment,
buildings, and land.
``Does the death tax impact family-run small businesses? Yes. My
family is still experiencing its devastating effects firsthand,''
nearly 8 years later.
It is time to repeal the death tax once and for all, and I urge my
fellow constituents and Members to support the bill.
Mr. HULSHOF. Mr. Speaker, I yield 2 minutes to the gentleman from
Virginia (Mr. Goode).
Mr. GOODE. Mr. Speaker, I want to commend the gentleman from Missouri
(Mr. Hulshof), the gentleman from Alabama (Mr. Cramer), the gentleman
from California (Mr. Cox), and all those who have worked so hard to get
rid of this onerous burden on a number of American citizens. The
Federal death tax is a job killer.
I represent the Fifth District of Virginia. We have a number of
counties and jurisdictions that focus on manufacturing. Many of our
smaller manufacturers have had to sell out to larger manufacturers; and
as a result, we have double-digit unemployment in a number of
jurisdictions that used to be the home to small manufacturers. A factor
in their selling out was the Federal death tax because they would not
have the cash to pay when death knocked on the door. If we pass this
bill, we will help the job situation in those types of jurisdictions in
the United States.
I hear the other side say that this is a bonanza and a budget breaker
because we will not be getting the revenue from the Federal death tax.
Let me tell the Members under the current law the really rich in this
country trust and foundation themselves out of the Federal estate tax.
I believe that Mr. Gates, the owner of Microsoft, is a proponent of
keeping the Federal death tax. He has got a father that is in charge of
his foundation. But many small farmers and average business persons are
not able to have the cash to set up the trusts and the foundations that
will get themselves out of the Federal estate tax. And I predict that
if we pass this bill, the incentive to set up those trusts and
foundations that avoid taxes will not be there and in the long run the
Treasury of the United States will benefit because we will still get
the capital gains tax when the assets are sold.
Mr. HULSHOF. Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from
California (Mr. Sherman).
Mr. SHERMAN. Mr. Speaker, this bill shows the courage to boldly go
where none have gone before, to levels of public debt and levels of
trade deficits that no nation has ever tried, higher than any have
dared.
We have a dollar that is dependent upon our fiscal markets, a trade
deficit that grows every year; and the result of this bill and its twin
cousins and related Siamese twins, the other parts of the Republican
tax and spend or borrow and spend policy, will be a declining dollar
and a declining economy or a dollar that crashes and an economy that
crashes. And this courage is all summoned up on behalf of the one
quarter of 1 percent of American families it is designed to help.
We require the men and women in uniform to risk the ultimate
sacrifice; and from our richest families, we say zero sacrifice under
the estate tax. Shame.
Mr. STARK. Mr. Speaker, I yield the balance of my time to the
gentlewoman from California (Ms. Pelosi).
Ms. PELOSI. Mr. Speaker, I thank the gentleman for his leadership and
his recognition on this very important legislation that is before us
today. I am very proud of the work of the gentleman from North Dakota
(Mr. Pomeroy), our Member of Congress, a very distinguished member of
the Committee on Ways and Means, for his initiative and leadership in
presenting to the Congress today an alternative that makes sense to the
American people, that is fair to America's families.
The gentleman from North Dakota (Mr. Pomeroy) speaks with authority
on the issues that impact rural America, small business, and America's
families and certainly America's family farms. He has their interests
at heart. He knows firsthand what their challenges are. That is what
makes his proposal so wise, and we all appreciate his leadership.
Mr. Speaker, in the 20th century, in the early part of the 20th
century, our country made a decision to honor our American value of
fairness by moving forward toward a progressive system of taxation. But
under 10 years of Republican rule, this Congress has consistently
passed legislation that has moved away from a progressive Tax Code.
Republican tax policies have rewarded wealth over work. In its analysis
of the President's budget, the nonpartisan Congressional Budget Office
found that the tax rate on wage income is nearly twice the rate of
capital income, unearned income. And now today Republicans have come to
the floor with an estate tax bill continuing their harmful approach.
The Republican estate tax bill again rewards extreme wealth. The
Republican approach would hurt more people than it helps by increasing
taxes and administrative burdens on more than 71,000 estates. And it
comes at a staggering cost of nearly $1 trillion over 10 years once it
takes full effect.
Democrats want to be fair to all Americans, and we support being able
to pass a better life on to our children and our grandchildren. But we
cannot support putting the luxuries of the super-rich before the needs
of America's families. The difference between the Democratic and
Republican bills is that Democrats take a more responsible, indeed, a
responsible approach that gives immediate tax relief to small
businesses and farmers across the country.
The Pomeroy substitute would provide relief to 99.7 percent of
estates in America, 99.7 percent; and .3 percent of estates would not
be covered under the bill. That is a small percentage, but a huge
amount of money being deprived from the National Treasury. The savings
achieved by pursuing the more fair and targeted approach put forth by
the gentleman from North Dakota (Mr. Pomeroy) would cover about one
half of the long-term shortfall facing Social Security.
Think of it: if we pass the gentleman from North Dakota's (Mr.
Pomeroy) bill, the savings would cover one half of the shortfall in
Social Security down the road. It would strengthen Social Security for
generations to come. That is the choice we are facing today. Do we want
to put the wealthiest .3 percent of estate holders ahead of millions of
American workers who have earned their Social Security benefits with a
lifetime of work? Do we want to continue reckless Republican tax
policies or return to a fair system of taxation?
This is a remarkable choice before us, and I hope that the American
people can avail themselves of the information to understand what is at
stake here. Basically, it all comes back to our deficit, to our budget,
and whether we have fiscal soundness in our budget or not. What the
Republicans are proposing is saying to average working families in
America every day they go to work, and every paycheck money is taken
from their paycheck for Social Security. What the Republicans are doing
today is putting their hand into that pot and saying we are taking that
money and we are going to subsidize the super-rich in our country, the
largest, wealthiest estates in our country, .3 percent.
{time} 1530
Mind you, the gentleman from North Dakota (Mr. Pomeroy) has covered
99.7 percent, which is most, of course, 99.7 percent of the people in
America. So anyone listening to this is not, odds are, affected in any
positive way by what the Republicans are proposing. In fact, they will
be hurt because of what it does to Social Security and what it does in
terms of capital gains for over 71,000 families in America.
So I think the choice should be clear, to choose to reward work. We
respect wealth. The creation of wealth is important to our economy. But
that does not mean we take money from working families to give more
money to the wealthiest families in America. And this at the same time
as the tax cuts that the administration has proposed to make permanent,
that would give people making over $1 million a year over $125,000 in
tax cuts.
Who are we here to represent? This is the reverse Robin Hood. We are
taking money from the middle class and we
[[Page H1929]]
are giving it to the super rich, and not only the super rich but the
super, super, super rich.
So let us come down and vote for America's workers, let us come down
in favor of America's families, and let us recognize that everybody,
the wealthiest as well as those not so wealthy, everyone in America
benefits when we have fairness in our Tax Code, where we have balance
in our budget in terms of our values and in terms of our fiscal
responsibility.
I urge our colleagues to support the very responsible Pomeroy
resolution and vote no on the irresponsible and reckless Republican
proposal.
Mr. HULSHOF. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I appreciate in large measure the tone of the debate.
What I would say to the gentlewoman who just spoke and to others who
raised the red herring of Social Security is to remind folks, first of
all, the Federal receipts from the Federal death tax represent less
than 1.5 percent of all revenues, first of all; and, secondly, that
none of the income tax money generated from the estate tax goes to
Social Security for the trust funds, and eliminating the tax in no way
will affect or impact current Social Security benefits. Not one bit.
Now, I do want to respond. I heard, I think, the gentleman from
Massachusetts earlier say that really there has been no policy
justification for keeping this tax, other than we need the money. In
fact, I think one gentleman said something, from Massachusetts, about
we need to pay our fair share.
Well, let me just ask you to consider your day. When you woke up this
morning, if you hit the snooze button on your electric alarm clock, you
are paying an electric tax. When you jumped into the shower this
morning, you paid a water tax. If you saw the gentleman from North
Dakota (Mr. Pomeroy) and I on C-SPAN debating this issue this morning,
you are paying a cable TV tax. When you drove to work this morning, you
are paying a gasoline tax. If you stopped for a cup of coffee, you paid
a sales tax. If you used the telephone at all today, you are paying a
telephone tax. And, of course, when you are at work, your wages are
subject to a payroll tax that does go into Social Security, payroll
taxes that do pay for Medicare, not to mention your income taxes. If
you drive home to your home and you are lucky enough and fortunate
enough to own a home, you are probably paying a local property tax.
When you kiss your spouse good night, you think that is free. No,
leave it to the Federal Government to continue to have this thing
called the marriage tax.
And, yes, if you scrape and invest and save and you build a family
business, have the audacity to pursue the American dream, the Federal
Government is there with its hand out saying give us 45 percent of the
value of your family business.
Now I have heard from my colleagues on the other side who say that
family farms are not affected. Well, then let me tell you a very quick
personal story, a story of a farm family in Missouri, a young married
couple who in 1956 left Portageville, Missouri, in the district of the
gentlewoman from Missouri (Mrs. Emerson), with $1,000 in their pocket,
and that was going to be the stake that they had. It happened that the
woman was an expectant mother with her first child and, as it turned
out, her only child.
That married couple happened to be my parents, and over the last 2\1/
2\ years I have had the unfortunate reality that obviously death is
inevitable, and I have had the unfortunate experience in our family of
having both my father pass away in late 2002 and my mother one year
ago.
I do not mind sharing with you, a 514 acre farm, a modest life
insurance policy, the house that I grew up in, a combine, three
tractors and some irrigation equipment, and that is it. And I am
sitting across the mahogany desk from our long-time family accountant
with the adding machine with a tape on it, and he is plugging in an
arbitrary value for these assets that my parents invested their soul
into. And I am breaking out into a cold sweat wondering whether or not
this business that they built and wanted to pass on is going to fall
above an arbitrary line or below an arbitrary line that we in Congress
have set.
Now we did not have to pay the tax, but 14 days ago I had the
requirement of filling out the form and paying the $2,000 accountant
fee; and, again, I do not quarrel with that. But, Mr. Speaker, the
death of a family member should not be a taxable event, period.
Mr. Speaker, I urge my colleagues to vote for H.R. 8.
Mr. HASTERT. Mr. Speaker, we come to the floor today to address an
issue of tax fairness. You see, no matter what kind of spin our friends
on the other side of the aisle try to use--the death tax simply isn't
fair. It's an unfair burden that the government has placed on families
and small business owners. I've called it a cancer--because it's slowly
destroying family farms and businesses across the nation.
Many of our small family businesses are wrapped up in a loved one's
estate. And when family members are left with a huge tax bill, it hits
them hard. I've heard countless stories from families who have had to
sell off a chunk of the family farm just to handle their tax burden.
Our friends on the other side of the aisle say that this is too costly
and it's bad for the budget. I say it's too costly not to act.
This tax is destroying small businesses. And we all know they're the
real job creators in our economy. What kind of nation have we become
when a small family farmer can't afford to pass the business on to his
children?
Look at the facts.
70 percent of family businesses do not survive the second generation,
87 percent do not make it to the third generation.
Many of these businesses are going belly-up because of the Death Tax.
We all realize that the government must have revenues, and that taxes
are a necessary evil. But this tax isn't necessary; it's just evil--
because it takes away the American Dream from too many American
families.
It's time we give families a real chance at the American Dream.
We need to tell the IRS to stop lurking around a grieving family's
pockets. Death is not a taxable event.
It's time we let the Death Tax die.
Mr. REYNOLDS. Mr. Speaker, the issue before us today is certainly not
a new on new one. During the past three Congresses, the House has voted
repeatedly in a bipartisan fashion to eliminate the death tax. And
today, once again, we have the opportunity to bury the death tax once
and for all.
The death tax punishes savings, thrift, and hard work among American
families. Small businesses and farmers, in particular, are unfairly
penalized for their blood, sweat and tears--paying taxes on already-
taxed assets. Instead of investing money on productive measures such as
creating new jobs or purchasing new equipment, businesses and farms are
forced to divert their earnings to tax accountants and lawyers just to
prepare their estates. All too often, those families are literally
forced to sell the family farm or business just to payoff their death
taxes.
Equally disturbing is the fact that the death tax actually raises
relatively little revenue for the federal government. In fact, some
studies have found that it may actually cost the government and
taxpayers more in administrative and compliance costs than it raises in
revenue.
Mr. Speaker, my rural and suburban district in western New York is
home to countless small businesses and family farms. They're owned by
hard-working families who pay their taxes, create jobs and contribute
not only to the quality of life in their communities, but to this
nation's rich heritage.
Is it so much to ask that they be able to pass on the fruits of their
labor--their small business or their family farm--to their children?
Must Uncle Sam continue to play the Grim Reaper? The fact is that they
paid their taxes in life--on every acre sown, on every product sold,
and on every dollar earned. They shouldn't be taxed in death, too.
Mr. Speaker, it's time to bury the death tax once and for all. I
commend Congressman Hulshof for introducing this crucial legislation
and Chairman Thomas for his continued leadership on this issue.
Mr. MACK. Mr. Speaker, I rise today to express my strong support of
the Death Tax Repeal Permanency Act of 2005. As a cosponsor of this
important legislation, I think it is absurd for the federal government
to continue punishing the families through double-taxation. Rather than
taxing people when they die, we should be encouraging families to save
for the future through hard-work and sound financial planning.
The Death Tax is one of the most burdensome and counterproductive of
all taxes. Small businesses create two-thirds of all jobs in the United
States, and 40 percent of GDP in the United States is generated by
small businesses. When the owner of a small family business passes
away, this tax causes families and small business owners severe
financial hardship, often to the point that the business must be
liquidated.
[[Page H1930]]
It is offensive that the government taxes someone all their life then
taxes them one last time when they die. Families should never have to
visit the IRS and the funeral home on the same day. A permanent repeal
is good for small businesses, family farmers, and the next generation
of entrepreneurs.
Mr. Speaker, I urge my colleagues to vote for the repeal of the Death
Tax.
Mr. BOUSTANY. Mr. Speaker, I strongly support H.R. 8, the Death Tax
Repeal Permanency Act of 2005, and encourage my colleagues to pass this
important legislation. This vital legislation will permanently repeal
the estate tax, a tax that is unjust, inefficient, and harmful to small
businesses, the backbone of our economy. Repeal of the Death Tax will
create a system that is more equitable and more productive for our
economy.
The Death Tax is a burden on our economy that costs the country
between 170,000 and 250,000 jobs every year. In Louisiana, our family-
owned farms have been faced with decreasing profitability and in many
instances the Death Tax is an additional burden that they cannot carry;
this tax is a leading cause of the dissolution for thousands of family-
run businesses across the country. It also diverts resources from
investment in capital, slowing research and development at a time when
our country is facing growing competition around the world. We cannot
afford to continue discouraging productivity and innovation.
Furthermore, the death tax is inefficient. Since the 1930's, revenue
from the tax has fallen steadily as a percentage of total federal
revenue. Compliance costs each year can be almost as high as the tax
itself, around $22 billion in 2003; thus every dollar raised by the
death tax is $2 that could have been invested in capital and new jobs.
The economic damage ofthe Death Tax is reason enough for its repeal,
but it is also fundamentally unjust. The rate of taxation is as high as
47%, and this is in addition to the taxes that were already paid on the
assets subject to this tax. The Death Tax also discourages hard work
and savings and instead encourages large-scale consumption. At a time
when we should and need to be encouraging individuals to save for their
future, we cannot continue to send this mixed message.
By repealing the Death Tax we will create a tax policy that is more
efficient, more equitable and more productive for our economy. I urge
Congress to act today to permanently repeal the Death Tax and ensure
that our future generations will be able to carry on the heritage of
our forefathers.
Mr. CANTOR. Mr. Speaker, I rise today in support of the permanent
repeal of the death tax. To put it simply, the death tax is just wrong.
It is wrong to encourage people to work hard all their life, only to
have the government reap the benefits when they die. It is wrong to
levy hefty taxes against families of thriving small business owners
just because their parents were successful. It is wrong to stifle
economic growth by forcing small businesses to close because of an
overbearing tax bill delivered by a greedy Uncle Sam.
Mr. Speaker, our Republican majority stands firmly against double
taxation on working families. Taxes have already been paid on the
assets subject to additional taxation under the death tax. I am
confident that Americans are far better equipped than politicians to
decide how to best spend their hard earned money. It is time for
Congress to let important fiscal decisions to be made where they should
be, at the kitchen table, not at the tax table.
Let's repeal this unjust tax and empower American working families
who know best how to make the right decisions for themselves.
Mr. SHAYS. Mr. Speaker, I rise in support of H.R. 8, the Death Tax
Repeal Permanency Act, although the base bill does not address the
estate tax in the manner I believe to be most prudent.
In 2003, Congressman Doug Bereuter and I introduced the Estate Tax
Relief Act, which would increase the estate tax exclusion to $10
million and lower the top rate to the level as the top income tax rate
(currently 35 percent). I think this is a much better solution than
total repeal.
Because estate and gift taxes have had devastating effects on small
businesses--many of which are forced to liquidate assets simply to pay
taxes ranging from 35 to 55 percent of the value of the business--I
think we need to provide significant relief in this area. My
preference, however, is to reduce estate taxes without entirely
eliminating them.
In the last Congress, I voted for today's base bill because if it is
not enacted the estate tax, which is being phased-out over a period
between 2001 and 2010, will return in 2011 with an exemption of just
$675,000 and a top rate of 55 percent.
While my first choice would be to significantly increase the
exclusion and lower the top rate, I believe full repeal is preferable
to the return of this onerous tax.
Mr. BOEHLERT. Mr. Speaker, I rise in strong support of H.R. 8,
legislation that would permanently repeal the Death Tax, a tax that
haunts millions of small business owners and farmers nationwide. The
last thing the federal government should be doing is taking more money
from small business owners and farmers, and curtailing further economic
growth. They are the backbone that drives our economy forward. I
commend Mr. Hulshof for his leadership on this issue and praise his
vision to continue lowering the federal tax burden.
Throughout my twenty-two years in Congress, I have proudly voted for
every major tax cut initiative considered by the House. Cutting taxes
is one of my highest priorities. I remain convinced that letting
Americans keep more of what they earn will help stimulate the economy
and create more jobs. People will not hide this much-needed relief
under their mattress or store it in their closet; instead they will
purchase necessary goods and services. An increased demand for these
goods and services will require more employees; therefore, providing
incentives for businesses to hire more workers--putting unemployed
Americans back on the job and providing a framework for long-term
economic growth.
The key to growing our economy is simple--allow Americans to keep
more of their own money to spend, save, and invest. My favorite four-
letter word--don't worry, it's a four letter word that can be used in
polite company--is JOBS. Permanently repealing the death tax will
create new jobs across the nation.
Cutting taxes is not unprecedented. Since 2001, Congress has
repeatedly passed legislation, which I'm proud to say I voted for, to
lower the federal tax burden. For example, we voted to extend relief
from the marriage penalty tax, a burdensome tax on married couples for
doing nothing more than saying ``I do.'' We also voted to extend the
Alternative Minimum Tax reforms (AMT), which is the right step toward
making sure the AMT applies only to those people it was designed to
cover, not working families just trying to make ends meet. We also
supported a measure to extend the 10% bracket to lower taxes for hard
working, low-income families. Finally, we voted to extend the $1,000
child tax credit.
It only makes sense to take the next step and permanently repeal the
Death Tax. I urge my colleagues to join me in supporting H.R. 8, and
put an end to this unfair, unjust, and inefficient burden on our
economy.
Mr. HONDA. Mr. Speaker, I rise in opposition to H.R. 8, legislation
that unwisely imperils our Nation's financial security in order to
advance the interests of an elite few.
Since my election to Congress, I have consistently advocated for
reasonable estate tax reform. Estate tax reform is extremely important
for all the people in the 15th District of California. High real estate
values and generous stock option packages have pushed many estates over
exemption limits. As a result, too many of my Santa Clara County
constituents have been burdened by an estate tax that was originally
written to affect only the very wealthiest Americans. The estate tax
needs to be modified to protect hardworking Americans and their heirs.
In keeping with this spirit, I intend to support a Democratic
alternative to H.R. 8 that will benefit almost all Americans. Offered
by Representative Earl Pomeroy, the Democratic substitute will increase
the estate tax exemption to $3 million for individuals and $6 million
for married couples effective January 1, 2006 with a scheduled increase
in 2009. Under this plan, 99.7 percent of all estates would have no
estate tax liability.
The Republican majority has put forward a more expensive plan to
benefit the three-tenths of one percent not covered by the Democratic
substitute. Their plan comes at a significant cost. Once fully in
effect, H.R. 8 will cost $1 trillion over 10 years. This astronomical
price tag will exacerbate record Federal deficits and undermine our
Nation's ability to strengthen key Federal priorities, including Social
Security, Medicare, education programs and veterans health care.
H.R. 8 may also harm more taxpayers than it would help. Current
income tax law provides for a ``step-up'' in the basis of an inherited
asset to its fair market value at the time of decedent's death. When
the heir sells the asset, the capital gain for income tax purposes is
measured by the difference between the heir's selling price and the
stepped-up basis of the asset. H.R. 8 repeals the step-up basis and
substitutes carryover basis rules in which the capital gain would be
measured by the difference between heir's selling price and the asset's
cost at the time when the decedent acquired it. As a result, all
estates with gross assets over $1.3 million would face reporting
requirements and tax liabilities potentially more burdensome than under
current law.
While I am deeply concerned with the problems surrounding the estate
tax, and believe that substantial, long-term reform is needed,
permanent repeal for all estates is not necessary to resolve these
issues. Given our nation's challenges, I cannot support the
Republican's fiscally irresponsible approach to this issue. I urge my
colleagues to oppose H.R. 8.
[[Page H1931]]
Mr. NEUGEBAUER. Mr. Speaker, I rise today as a cosponsor of H.R. 8 to
express my strong support for this important legislation to permanently
repeal the estate or ``Death'' tax.
The estate tax is one of the most unpopular, destructive taxes
collected by the Federal Government. It forces many small businesses
and farms to dissolve, undermines incentives for work, savings, and
investment, and leads to unnecessary development of environmentally
sensitive land. By permanently repealing the estate tax, we would be
eliminating a cruel tax that devalues the hard work and confiscates the
savings of some of our most productive citizens.
As we all know, the estate tax is scheduled to be totally repealed on
January 1, 2010; unfortunately, this repeal will sunset on December 31,
2010. At that point, unless the Congress acts, the estate tax will
revert to the 2001 level. As no one I know can accurately guess which
year they might pass on to the hereafter, only one year of complete
relief of the estate tax is not only cynical--it's bad policy. The
uncertainty of not knowing whether or not the death tax will really be
repealed, makes it difficult for American taxpayers to make plans for
their futures, their spouses' futures, and the futures of their
children. Additionally, the tax increase that would result if Congress
fails to act would be entirely unfair to many of our constituents.
On the one hand, I am pleased that the House is once again taking
action today to rid our Tax Code of this punitive measure. But we've
done this several times in the past and each time it has gotten bogged
down in the other body. Let's hope we don't have to meet again to do
what should have been done years ago. Let's do the right thing today.
Let's finally and irrevocably repeal the death tax.
Ms. FOXX. Mr. Speaker, today I voice my strong support for the Death
Tax Repeal Permanency Act of 2005.
It is imperative we pass this very important legislation. The Death
Tax is an unreasonable and unfair burden on thousands of American
families, small businesses, and family farms.
The Death Tax is the largest threat to the vitality of family-owned
businesses and farms because most of their owners have the entire value
of their business or farm in their estate. The Federal Government
currently receives nearly half of an estate when the owner passes. As a
result, more than two-thirds of family businesses do not survive the
second generation and nearly 90 percent do not make it to the third
generation. So much for the American dream. Rather than encouraging
people to build their own livelihoods, the Death Tax discourages hard
work and savings.
According to the Heritage Foundation, the Death Tax costs our country
up to 250,000 jobs each year. By permanently abolishing this tax, we
could add more than 100,000 jobs per year.
As my colleague, Representative Sam Johnson of Texas, said: Americans
receive a birth certificate when they are born, a marriage license when
they are wed, and a tax bill when they die. This is a disgrace. I
encourage my colleagues to vote ``yes'' for the Death Tax Repeal
Permanency Act of 2005.
Mr. JEFFERSON. Mr. Speaker, Benjamin Franklin noted over 200 years
ago that ``in this world nothing can be said to be certain, except
death and taxes.'' Unfortunately, the convergence of these two
inescapable events, in the form of the Federal estate tax, results in a
number of destructive outcomes in terms of slower economic growth,
reduced social mobility, and wasted productive activity. Moreover, the
costs imposed by the estate tax far outweigh any benefits that the tax
might produce. For these reasons, among others, I urge my colleagues to
join with me in support of permanent repeal of the Federal estate tax.
The estate tax has been enacted four times in our Nation's history--
each time in response to the exigent financial straits deriving from
war. In three of those instances (1797-1802,1862-70, and 1898-1902),
the estate tax was repealed shortly thereafter. Most recently, the
estate tax was reintroduced during World War I (1916) and has existed
ever since. What was meant to bring short-term budgetary relief has
become a permanent burden on America's farmers, small business owners
and families.
Some observers might believe that the estate tax is free from serious
controversy. For example, it is often claimed that the tax only falls
on the ``rich'' and thus serves to reduce income inequality. Other
supporters of the estate tax point to the $22 billion in tax revenues
for 2003, or to the incentive for charitable bequests. Nonetheless,
there are many reasons to question the value of taxing the accumulated
savings of productive, entrepreneurial citizens. Not the least of these
reasons is the widely-held belief that families who work hard and
accumulate savings should not be punished for sound budgeting.
Additionally, it is unclear whether the estate tax raises any revenue
at all, since most if not all of its receipts are offset by losses
under the income tax.
The freedom to attain prosperity and accumulate wealth is the basis
of the ``American dream.'' We are taught that through hard work we can
achieve that dream and, God willing, pass it on to our children.
Unfortunately, for many the estate tax turns that dream into a
nightmare. The current tax treatment of a person's life accumulations
is so onerous that when one dies, the children are often forced to turn
over half of their inheritance to the Federal Government. The estate
tax, which is imposed at an alarming 45 to 47 percent rate, is higher
than in any other industrialized nation in the world except Japan.
Thus, many families must watch their loved one's legacy being snatched
away by the Federal Government at an agonizing time. This is tragically
wrong and nullifies the hard work of those who have passed on.
In the minority community there are numerous examples of the
injurious effects of the estate tax. The Chicago Daily Defender--the
oldest African American-owned daily newspaper in the United States--is
a good example of the unique problem presented for minority families.
It was forced into bankruptcy due to financial burdens imposed by the
estate tax. But, beyond that, the questions were--was the Chicago
Defender family forced to sell, could a minority owner be found to
purchase it, or would it become a white-owned asset, reducing the
overall wealth of the African American community?
On a smaller scale, another potential victim, a storeowner named
Leonard L. Harris who is a first generation owner of Chatham Food
Center on the South Side of Chicago is frightened that all the work and
value he has put into his business will be for naught because it will
be stripped from his two sons. According to Mr. Harris, ``My focus has
been putting my earnings back into growing the business. For this
reason, cash resources to pay federal estate taxes, based on the way
valuation is made, would force my family to sell the store in order to
pay the IRS within 9 months of my death. Our yearly earnings would not
cover the payment of such a high tax. I should know. I started my
career as a CPA.'' These two stories are not isolated.
According to the Life Insurance Marketing Research Association, less
than half of all family-owned businesses survive the death of a founder
and only about 5 percent survive to the third generation.
Another recent study found the following:
Eight out of ten minority business owners questioned believe the
Federal estate tax is unfair.
Only one minority business owner in three has been able to take any
steps whatsoever to prepare for the ramifications of the estate tax.
One in four believes that his or her heirs will be forced to sell off
at least part of their businesses to pay the estate tax liability.
Fully half the respondents already know a minority-owned business
that has had trouble paying the tax, including some that have been
forced to liquidate.
Those few minority-owned businesses that have been able to take steps
to reduce their estate tax liability complain that it has detracted
from their ability to meet business objectives by channeling time,
energy and resources away from productive endeavors.
Many of my colleagues who are proponents of the estate tax contend
that the tax adds progressivity to the Tax Code and provides needed tax
revenue. They argue that the estate tax falls on wealthier and higher
income individuals and increases the total tax paid by this segment of
the population relative to their income. This helps offset the
regressivity of payroll taxes and excise taxes, which fall more heavily
on low-income groups relative to their income. They also argue that
increasing the unified credit to $4, $5, $6 or $7 million would remove
small family-owned businesses and farms from the harsh impact of the
estate tax.
I share my colleagues concerns about protecting the tax base and
ensuring that our Tax Code remains progressive. However, I find these
arguments in support of the estate tax unconvincing in the face of
substantial evidence otherwise.
First, there is no clear evidence that the estate tax is progressive
or that larger estates are paying a greater portion of the tax.
Wealthier members of our society are able to reduce and or eliminate
the impact of the estate tax by stuffing money away here and there at
the suggestion of high-priced attorneys and accountants. Similarly, tax
planning techniques such as gift tax exclusions or valuation discounts
reduce the size of the gross estate but do not appear in the IRS data
causing effective tax rates to be overstated for many larger estates.
The Institute for Policy Innovation recently revealed evidence of this
fact in a study showing that the effective tax rate on the most
valuable estates was actually lower than that on medium-sized estates.
Second, the insignificant amount of money the estate tax raises for
the Federal Government cannot justify the harmful effects it has on
business owners who spend more to avoid
[[Page H1932]]
the tax than the federal tax revenue raised. According to the
President's fiscal year 2005 Budget, the estate and gift tax brought in
$22.8 billion in revenues to the Federal Government in 2003. This
represents less than 1.1 percent of the total revenues out of a more
than $2 trillion Federal budget and less than the amount of money spent
complying with, or trying to circumvent, the death tax.
In 2003, Congress' Joint Economic Committee reported that the death
tax brought in $22 billion in annual revenue, but cost the private
sector another $22 billion in compliance costs. Therefore, the total
impact on the economy was a staggering $44 billion. And, when one
calculates the amount of money spent on complying with the tax, the
number of lost jobs resulting from businesses being sold, or the
resources directed away from business expansion and into estate
planning, it is clear why this punitive tax must be eliminated.
It is also important to note that many economists believe that
overall tax revenues would increase if the estate tax were repealed.
According to a study of estate tax repeal proposals, which was prepared
by Dr. Allen Sinai for American Council for Capital Formation and
Center for Policy Research, Federal tax receipts would rise in response
to a stronger economy, feeding back 20 cents of every dollar of estate
tax reduction. In fact, over the years 2001 to 2008, estate tax repeal
would increase real Gross Domestic Product by $90 billion to $150
billion, and U.S. employment by 80,000 to 165,000.
Finally, it is not clear that increasing the unified credit to $6 or
$7 million would remove small family-owned businesses and farms from
the threat of the estate tax. The Small Business Administration's
definition of a small business is based on industry size standards. For
example, a construction company or grocery store with less than $27.5
million in annual receipts is considered a small business. Thus,
families who build their businesses past the exemption amount will
continue to face estate taxes that range from the aforementioned,
alarming rate of 45 to 47 percent. The exemption threshold would not
help these small businesses. More significantly, without significant
reform or, more appropriately, repeal, these same small businesses face
the prospect of estate tax rates as high as 60 percent beginning in
2011.
Permanent repeal of the estate tax will provide American families
with fairness in our tax system and remove the perverse incentive that
makes it is cheaper for an individual to sell the business prior to
death and pay the individual capital gains rate than pass it on to
heirs. But for minorities, it provides much more. It will allow wealth
created in one generation to be passed on to the next thereby
establishing sustainable minority communities through better jobs and
education, better healthcare, and safer communities.
Mr. Speaker, I urge my colleagues to support H.R. 8 to permanently
repeal the Federal estate tax and to restore fairness to our Nation's
Tax Code.
Mr. ETHERIDGE. Mr. Speaker, I rise today to voice my opposition to
H.R. 8. As a part-time farmer and former small business owner, I have
long supported responsible legislation to provide estate tax relief for
family-owned businesses. Unfortunately, this bill will not accomplish
that goal.
Throughout my service in the U.S. House, I have been a strong
supporter of estate tax relief for family farmers and small business
owners. The first bill I introduced as a Member of Congress was a bill
to raise the inheritance tax exemption from $600,000 to $1.5 million
and for the first time indexed it to inflation. But H.R. 8 is an
extremely irresponsible bill that will add billions to our national
debt for our children and grandchildren to pay and will harm more
taxpayers than it helps.
The unfortunate reality of our situation is that we have witnessed
the most dramatic fiscal reversal in our Nation's history. Our budget
surpluses have been frittered away, and our Nation is now drowning in
red ink with ever- growing budget deficits and increasing Federal debt.
The primary culprits for our increasing debt are the risky,
irresponsible tax schemes the Republican Congress has enacted the last
4 years.
Instead of adopting a bill that would increase the burden on our
children and grandchildren, we need a common-sense solution that would
exempt the vast majority of Americans from an estate tax while
maintaining a degree of fiscal integrity.
That is why I am supporting the Democratic substitute authored by
Representative Earl Pomeroy. This substitute provides an estate tax
exemption of $3 million for individuals and $6 million for couples
beginning in 2006, and the exemption would increase to $3.5 million and
$7 million respectively in 2009. Furthermore, this plan would instantly
repeal the estate tax on a vast majority of farms and small businesses,
as well as shield heirs from dramatic capital gains tax liabilities
that are part of the Republican plan. The U.S. Department of
Agriculture has estimated that more farm estates would have an
increased tax liability from the Republican plan's carry-over basis
rules than would ever benefit from the repeal of the estate tax.
I support estate tax relief, but not at the expense of our senior
citizens who benefit from Social Security and Medicare. The only way to
pay for the Republican bill is by taking more money out of the Social
Security an Medicare Trust Funds and replacing it with IOUs. H.R. 8
will compound the fiscal mistakes Congress has made the last 2 years
with its policy of tax cuts at any cost, including our children's
education and our Nation's future.
The people of North Carolina's Second District elected me to help
chart a common-sense, fiscally prudent course for the country. I
pledged to represent my constituents by paying down the national debt;
saving Social Security and Medicare funds for older Americans, and
investing our country's resources into education, health care and other
initiatives that enable people to improve their lives. H.R. 8 is
inconsistent with these goals; therefore, I oppose the bill.
Mr. WELDON of Florida. Mr. Speaker, I want to express my strong
support for H.R. 8, the Death Tax Repeal Permanency Act of 2005. I have
supported this measure in the past and have introduced similar
legislation to make the death tax repeal permanent. I believe it is
important that we accomplish the goal of passing this in the House and
the Senate and seeing this bill enacted into law.
The Death Tax needs to die. Along with the marriage penalty, the
death tax is perhaps the most disgraceful tax levied by the Federal
Government and it should be repealed immediately. The death tax is
double taxation. Small business owners and family farmers pay taxes
throughout their lifetime, then at the time of death they are assessed
another tax on the value of the property on which they have already
paid taxes. This is unfair, unjust and an inefficient burden on our
economy.
I have spoken in the past about a constituent of mine, Danny Sexton
of Kissimmee, FL and owner of Kissimmee Florist. He, like millions of
other Americans, has experienced the sad realities of the Death Tax. He
joined me several years ago in Washington to highlight the adverse
impact the Death Tax had on his family business.
Mr. Sexton, who comes from a family of florists, inherited his
uncle's flower shop and was faced with paying almost $160,000 in estate
taxes. This forced him to have to liquidate all of the assets, layoff
workers and take out a loan just to pay the death tax. He also had to
establish a line of credit just to keep the operation running.
Danny Sexton is the reason we need to appeal the death tax. The death
tax isn't a tax on just the rich, it is a tax that hurts family owned
businesses--family owned businesses that are the backbone of this great
Nation. It also caused several average workers to lose their jobs.
Family owned businesses provide and create millions of jobs for
American workers. The people who worked in Mr. Sexton's florist were
not rich, but they lost their jobs because of the Death Tax.
In a recent survey conducted by the National Federation of
Independent Businesses, 89 percent of small business owners favored
permanent repeal of the death tax. Why? Because these small business
owners know this tax may mean the death of their business for future
generations. According to the Center for the Study of Taxation, more
than 70 percent of family businesses do not survive the second
generation and 87 percent do not make it to the third generation.
Family owned and operated businesses deserve the right to be inherited
by the next generation without the blow of the death tax.
In current law, the death tax is phased-out, completely repealed in
2010. But that is not good enough because in 2011, the tax reemerges in
full force. That means taxpayers must plan for three different
scenarios when passing along their family business--pre- 2010 when the
exemption levels are gradually increasing and the top rate gradually
decreasing; 2010 when the tax is completely repealed; or 2011 when the
tax reemerges. This is complicated, confusing and hard to plan for--
unless a small business owner knows for certain when his or her death
will occur. When we make this tax repeal permanent, taxpayers will have
the ability to make long-term financial plans with certainty and will
have the opportunity to pass on their hard earned family businesses and
farms to future generations. It will also ensure that those who work
for these small businesses are able to keep their jobs.
I urge my colleagues to vote for H.R. 8, the Death Tax Repeal
Permanency Act of 2005.
Mr. HOLT. Mr. Speaker, I favor cutting unnecessary, ineffective or
unfair taxes, but in balanced and fiscally responsible ways. I have
been one of the few Democrats in Congress who has been willing to cross
party lines to vote for tax cuts. I have voted to eliminate the estate
tax in the past. I have been willing to vote for eliminating the
marriage penalty, to vote for cutting taxes for small businesses, to
[[Page H1933]]
vote for cutting taxes to help people pay for education and retirement,
and to vote for cutting taxes for senior citizens and to give business
tax credit for research work.
With a war in Iraq and looming postwar costs, increased expenses for
domestic security and a ballooning budget deficit, Congress must
exercise restraint on both revenues and spending to prevent fiscal
policy from spiraling out of control. The consensus in favor of
balancing the budget over the long term must be re-established.
There are a wide range of pressing national challenges that need
action, from rapidly increasing health care costs, to our increasing
dependence on ever-more-expensive foreign oil, to a broken and
increasingly corrupt political system, and yet today we are passing a
bill that will only help a few of the already wealthy.
Today we are debating total elimination of the federal inheritance
tax. Permanently repealing the estate tax would further balloon the
Federal budget deficit by an estimated $290 billion through 2015; and
by $745 billion through 2021. Add in the interest costs of borrowing
the funds to pay for this measure, and the true 10-year cost is nearly
$1.3 trillion.
I support the substitute offered by Representative Earl Pomeroy which
will protect families and small business from the estate tax. The
substitute increases the estate tax credit to $3 million, $6 million
for married couples, beginning in 2006. Under the substitute, the
credit would be increased to $3.5 million, $7 million for couples, in
2009. The Pomeroy substitute would eliminate tax reporting compliance
burdens and carryover taxes for over 71,000 estates each year which
effects small business and families. According to Representative
Pomeroy's calculation, his package would exempt 99.68 percent of all
estates from the estate tax, yet it would save the Treasury $217
billion compared to total repeal. It is worth noting that the saving of
$217 billion is equal to 40 percent of the shortfall of Social Security
of the next 75 years.
Mr. Speaker, today the national debt is the largest in history.
Americans now collectively owe about $7.8 trillion. Here we have
another tax cut that is not being paid for, even as the Bush
administration and the leadership of this Congress spend more than the
American government has ever spent on homeland security and on all the
other expenses of running the Government--especially the huge costs of
the war in, and occupation of, Iraq. Government borrowing of this scale
places the burden of repaying our debts on our children.
Governing is about making choices. Our constituents all across
America sent us to Congress to make the tough decisions. They did not
send us here so we can pass those decisions on to our children, and
they certainly did not send us here to pass the cost of our decisions
on to our children.
I want the people of this country to realize that, right now, we owe
collectively, about $4.5 trillion to foreign countries. Japan holds
$702 billion of our debt; China, including Hong Kong, $246 billion; the
U.K. $163 billion; Taiwan, $59 billion; Germany, $57 billion; OPEC
countries, $65 billion; Switzerland, $50 billion; Korea, $68 billion;
Mexico, $41 billion; Luxembourg, $29 billion; Canada, $43 billion--the
list goes on and on.
More tax cuts of this size will not only jeopardize critical public
services now, but they will also hurt Americans well into the future.
Massive deficits now create large debt and will create high interest
payments that will crowd out spending on public investments for future
generations. Moreover, these deep deficits threaten to increase
interest rates in the future--making it harder for Americans to buy
homes and afford higher education and making it harder for businesses
to raise capital.
I urge my colleagues to join me in supporting permanent reform of the
estate tax, but not irresponsibly repealing it. Government should
follow the principle of helping the present generation and helping
future generation as well--not leaving future generations to pay our
bill.
Amendment in the Nature of a Substitute Offered by Mr. Pomeroy
Mr. POMEROY. Mr. Speaker, pursuant to H. Res. 202, I offer an
amendment in the nature of a substitute.
The SPEAKER pro tempore (Mr. LaHood). 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.
Pomeroy:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Certain and Immediate Estate
Tax Relief Act of 2005''.
SEC. 2. RETENTION OF ESTATE TAX; REPEAL OF CARRYOVER BASIS.
(a) In General.--Subtitles A and E of title V of the
Economic Growth and Tax Relief Reconciliation Act of 2001,
and the amendments made by such subtitles, are hereby
repealed; and the Internal Revenue Code of 1986 shall be
applied as if such subtitles, and amendments, had never been
enacted.
(b) Sunset Not To Apply.--Section 901 of the Economic
Growth and Tax Relief Reconciliation Act of 2001 shall not
apply to title V of such Act.
(c) Conforming Amendments.--Subsections (d) and (e) of
section 511 of the Economic Growth and Tax Relief
Reconciliation Act of 2001, and the amendments made by such
subsections, are hereby repealed; and the Internal Revenue
Code of 1986 shall be applied as if such subsections, and
amendments, had never been enacted.
SEC. 3. MODIFICATIONS TO ESTATE TAX.
(a) Immediate Increase in Exclusion Equivalent of Unified
Credit.--Subsection (c) of section 2010 of the Internal
Revenue Code of 1986 (relating to applicable credit amount)
is amended by striking all that follows ``the applicable
exclusion amount'' and inserting ``. For purposes of the
preceding sentence, the applicable exclusion amount is
$3,500,000 ($3,000,000 in the case of estates of decedents
dying before 2009).''.
(b) Freeze Maximum Estate Tax Rate at 47 Percent;
Restoration of Phaseout of Graduated Rates and Unified
Credit.--
(1) Paragraph (1) of section 2001(c) of such Code is
amended by striking the last 2 items in the table and
inserting the following new item:
``Over $2,000,000...................... $780,800, plus 47 percent of
the excess of such amount over
$2,000,000.''.
(2) Paragraph (2) of section 2001(c) of such Code is
amended to read as follows:
``(2) Phaseout of graduated rates and unified credit.--The
tentative tax determined under paragraph (1) shall be
increased by an amount equal to 5 percent of so much of the
amount (with respect to which the tentative tax is to be
computed) as exceeds $10,000,000. The amount of the increase
under the preceding sentence shall not exceed the sum of the
applicable credit amount under section 2010(c) and
$159,200.''.
(c) Effective Date.--The amendments made by this section
shall apply to estates of decedents dying, and gifts made,
after December 31, 2005.
SEC. 4. VALUATION RULES FOR CERTAIN TRANSFERS OF NONBUSINESS
ASSETS; LIMITATION ON MINORITY DISCOUNTS.
(a) In General.--Section 2031 of the Internal Revenue Code
of 1986 (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 chapter and chapter 12--
``(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,
``(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,
[[Page H1934]]
``(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 chapter and chapter 12, 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), no
discount shall be allowed by reason of the fact that the
transferee does not have control of such entity if the
transferee and members of the family (as defined in section
2032A(e)(2)) of the transferee have control of such
entity.''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers after the date of the enactment of
this Act.
Amend the title so as to read: ``A bill to amend the
Internal Revenue Code of 1986 to retain the estate tax with
an immediate increase in the exemption, to repeal the new
carryover basis rules in order to prevent tax increases and
the imposition of compliance burdens on many more estates
than would benefit from repeal, and for other purposes.''.
The SPEAKER pro tempore. Pursuant to H. Res. 202, the gentleman from
North Dakota (Mr. Pomeroy) and a Member opposed each will control 30
minutes.
Mr. HULSHOF. Mr. Speaker, I claim the time in opposition.
The SPEAKER pro tempore. The gentleman from Missouri (Mr. Hulshof)
will be recognized for 30 minutes in opposition to the amendment in the
nature of a substitute.
The Chair recognizes the gentleman from North Dakota (Mr. Pomeroy).
Mr. POMEROY. Mr. Speaker, I am pleased to begin the presentation of
the amendment in the nature of a substitute by yielding such time as he
may consume to the distinguished gentleman from Maryland (Mr. Hoyer),
the minority whip.
Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, I was very interested in the last presentation. The
bottom line was, he did not pay a tax. All that story, all those facts,
and he did not pay a tax. He did pay his accountant some money to go
through and make sure that he was doing what was right. He did that
because the Tax Code is extraordinarily complicated and has been made
25 percent more complicated by the Republican majority over just the
last 48 months.
Mr. Speaker, let us be absolutely crystal clear: This Republican
proposal is nothing but a tax increase. Hear me, this is a tax increase
disguised as a tax cut.
``Who are you, Mr. Hoyer? Lewis Carroll? What is this gibberish that
you are talking about?''
It would raise taxes for thousands of families and thousands of
family farmers and small businesses. There are no two ways about it.
For years, House Republicans have proclaimed that the elimination of
the inheritance tax, a tax, now hear me on this side of the aisle, I
know you want to hear this, a tax first proposed by Theodore Roosevelt
in 1906. Now for those of you who may not be quite fully cognizant of
our history, Theodore Roosevelt, of course, was a Republican President
of the United States of America. It was intended to save family farms
and small businesses.
But, today, not according to the gentleman from Maryland (Mr. Hoyer),
not according to the gentleman from North Dakota (Mr. Pomeroy), not
according to all the Democrats in this House or in the Senate,
according to the Republican Department of Agriculture, I tell my friend
from Missouri, the Republican Department of Agriculture says more farm
estates would have increased tax liability from the carryover basis
rules in this bill than would benefit from repeal of the inheritance
tax. In other words, if we pass this bill, family farmers and small
businesses are going to pay more taxes.
Now, I am for the Pomeroy alternative. First of all, we do not have
that complicated look-back to find out what the basis was 10, 20, 30,
40, 50 years ago. We do as we do now, what is the basis now when you
get it?
But we exempt under the substitute offered by the gentleman from
North Dakota (Mr. Pomeroy) $7 million. That means that 99.7 percent of
the people in America would never pay an estate tax. I am for that. So
this argument, I tell my friend from Missouri, is about the three-
tenths of 1 percent of the very largest estates in America. Because if
you vote for Pomeroy, 99.7 percent are exempt. So, as we have been
doing for the last 4 years, we have been talking about the upper 1
percent. That is who we are talking about.
Now we are pretty well off in Congress. The American people do pretty
well by us, very frankly. I am doing well enough. I paid a little bit
of Alternative Minimum Tax this year. It shocked me, but my accountant
pointed out that I did. So we are doing pretty well.
But there are a whole lot of people that are not doing nearly as well
as we are doing, and we are not helping them at all by simply giving
away revenue that we could spend on the education of their kids and the
defense of their country, which we are borrowing for, of course, so
that their kids will pay the debts.
Mr. Speaker, under current law, the Joint Economic Committee
estimates that only 7,500 estates, in a Nation of 290 million people
where some 3 million people die every year, 7,500 estates out of the 3
million people that die would have any estate tax liability in 2009.
However, the permanent switch to carryover basis rules, rules that are
used to calculate cap gains, would impact an estimated 71,000
additional estates, and many of those estates would face capital gains
tax increases.
Now even as this bill increases the capital gains tax on many farm
estates and small businesses, I tell my friend, it still adheres to
what seems to be the Republican Party's core economic principle: fiscal
irresponsibility.
The gentleman says this tax, that tax, and he is right. There are a
lot of taxes on all of us, and we have a lot of services in this
country. And, frankly, for the most part, as the gentleman knows,
particularly if you take the industrialized nations, our tax structure
at the Federal level is lower. But, still, they are high, and we would
like to see them reduced.
But the fact of the matter is, I have three children, three
daughters, they are wonderful people, and they provided me with three
grandchildren. And I am buying stuff. I am buying defense against
terrorists, I am buying stabilizing Iraq, I am buying education, I am
buying health care, I am buying roads. All of us are buying that.
I do not want to have to say to my grandchildren, look, I am going to
use it, but you pay for it. That is an immoral policy as well as a
fiscally irresponsible one, an unwillingness to pay our bills.
Now, this is $290 billion. Just $29 billion a year over 10 years. No
sweat. Shoot, we are borrowing all the Social Security money right now
that the Republicans said they were not going to spend a nickel of.
They are going to spend $170 billion of Social Security money this year
alone. How do we do that? We borrowed $118 billion last February, from
foreigners mostly, which we are putting our kids deeply in hock to
China, to Japan, to Germany.
At a time of record budget deficits of nearly half a trillion
dollars, this Republican bill would cost nearly $1 trillion over the
first 10 years of full repeal. It would irresponsibly drive our Nation
even further into debt and immorally force our children to continue to
be liable for our bills.
In sharp contrast, I tell my friend from Missouri, and I wish there
were more people on this floor, but it is only giving away, you know,
$250 billion to $1 trillion. What do we care? We have given away
trillions of dollars over the last 4 years as we go trillions of
dollars into debt. As a matter of fact, $9 trillion into debt.
The substitute offered by the gentleman from North Dakota (Mr.
Pomeroy) is excellent. It costs less than
[[Page H1935]]
one-third of this Republican bill. It would permanently increase the
current exclusion amounts to $3.5 million per individual and $7 million
for couples. Three-tenths of the estates would be left in 2009 and, as
a result, exempt 99.7 percent of all estates from estate tax liability.
Mr. Speaker, I congratulate the gentleman from North Dakota (Mr.
Pomeroy) for this alternative. It solves the problems of small farmers,
it solves the problems of small businesses, it solves the problems of
pretty significant but nevertheless smaller estates, to make sure that
the hard work of mom and dad can be passed along to their daughter and
their son and their son's and daughter's families.
{time} 1545
We agree with the gentleman from Missouri (Mr. Hulshof) that that is
a good objective, but we also agree that we ought to have fiscally
responsible policies.
Mr. POMEROY. Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, just a quick comment for whatever time I
may consume before yielding to the gentleman from South Carolina (Mr.
Barrett).
Did I hear the last speaker correctly, that we have given away, whose
money is that? It would be the American taxpayers' money, who are
probably, even as we speak, trying to grapple with those forms as they
have tax day coming, as the income tax payers of America that provide
for the comfortable living that he and I enjoy.
Mr. HOYER. Mr. Speaker, will the gentleman yield?
Mr. HULSHOF. I yield to the gentleman from Maryland.
Mr. HOYER. Mr. Speaker, I ask my friend, whose debt is it?
Mr. HULSHOF. Mr. Speaker, I would say to my friend, and of course, as
we have had a lot of unforeseen circumstances that have occurred, as
was mentioned earlier, Iraq and Afghanistan. And let us hope and pray
that as permanent repeal occurs, if it occurs, in the outyears that we
will not be in that war on terrorism. But I would say to my friend, and
I appreciate the question, but he also mentioned the Department of
Agriculture, and lest, Mr. Speaker, anyone wonder who those
agricultural groups are that represent farm families across America, I
would place into the Record a letter from said groups.
In essence, the letter reads as follows: The groups listed below
support permanent estate tax repeal, ask for this body to vote for H.R.
8, and the letter goes on to say, individuals and families own
virtually all of the farms and ranches that dot America's rural
landscape. Death taxes threaten the transfer of these operations to the
next generation of food and fiber producers. Sincerely, Alabama Farmers
Federation, American Farm Bureau Federation, American Sheep Industry
Association, the American Soybean Association, Farm Credit Council,
National Association of Wheat Growers; to my friend from North Dakota,
National Cattlemen's Beef Association, National Corn Growers
Association, National Cotton Council, National Grain Sorghum Producers,
National Milk Producers Federation, National Potato Council, USA Rice
Producers Federation, U.S. Rice Producers Association, and the Western
Peanut Growers Association.
April 13, 2005.
House of Representatives,
Washington, DC.
Dear Representative: The groups listed below support
permanent estate tax repeal and ask you to vote for H.R. 8,
the Death Tax Repeal Permanency Act of 2005.
Individuals and families own virtually all of the farms and
ranches that dot America's rural landscape. Death taxes
threaten the transfer of these operations to the next
generation of food and fiber producers.
In 2001, Congress recognized the harm that death taxes
cause family businesses and voted to repeal this onerous tax.
Unfortunately, repeal scheduled for 2010 is temporary and
sunsets after only one year.
Congress should act now to make death tax repeal permanent.
Please show your support for permanent death tax repeal by
voting for H.R. 8 when the bill reaches the House floor this
week.
Sincerely,
Alabama Farmers Federation, American Farm Bureau
Federation, American Sheep Industry Association,
American Soybean Association, Farm Credit Council,
National Association of Wheat Growers, National
Cattlemen's Beef Association, National Corn Growers
Association, National Cotton Council, National Grain
Sorghum Producers, National Milk Producers Federation,
National Potato Council, USA Rice Federation, US Rice
Producers Association, Western Peanut Growers
Association.
Mr. Speaker, to my friend from South Carolina, I am not sure if any
of those groups happen to represent farm families in his district, but
I yield 2 minutes to the gentleman from South Carolina (Mr. Barrett).
Mr. BARRETT of South Carolina. Mr. Speaker, I thank the gentleman for
yielding me this time. And, yes, I say to the gentleman, they are from
South Carolina, and I see them every day.
Mr. Speaker, I rise today against the Pomeroy substitute and in full
support of H.R. 8, the Death Tax Repeal Permanency Act of 2005.
The death tax defies common sense and is fundamentally unfair, Mr.
Speaker. Prior to 2001, the top death tax rate was 55 percent. Today,
the top rate is 47 percent, and these are unbelievably high tax rates,
especially when the tax is imposed after a lifetime of hard work.
The death tax is also a job killer, Mr. Speaker. Resources that could
be used to expand businesses and hire new employees are instead used
inefficiently to plan for the impact of the death tax. The Joint
Economic Committee noted that the death tax reduces the stock in the
economy, listen to this now, approximately one-half of $1 trillion.
Mr. Speaker, the permanent repeal of the death tax will not only
ensure that small businesses and family farms are not subject to these
unfair rates of taxation, but also simplify the tax law and facilitate
long-term financial planning. The 2010 sunset date for the death tax
repeal makes it nearly impossible for taxpayers to make long-term
financial decisions as they relate to the tax. Enactment of the Death
Tax Repeal Permanency Act promotes fairness and simplification by
giving taxpayers the certainty they deserve.
Mr. Speaker, I strongly support H.R. 8, the Death Tax Repeal
Permanency Act of 2005, and I urge my colleagues to vote ``no'' on the
Pomeroy substitute amendment.
Mr. POMEROY. Mr. Speaker, I yield 4 minutes to the gentleman from
Oregon (Mr. Blumenauer), the other member of the Earl Caucus of this
House.
Mr. BLUMENAUER. Mr. Speaker, I appreciate my namesake's courtesy in
permitting me to speak on his substitute. I appreciate his hard work
and clarity in dealing with this issue and a step forward to stop a
cynical game that I have watched be played here in this Congress since
I was first elected 9 years ago.
There is today, and there has been throughout these 9 years, a
consensus to make adjustments to the inheritance tax, to make it less
steeply graduated, to raise the exemptions, to be able to do fine-
tuning, to deal with the legitimate problems of small, closely held
businesses and farms. And if the Republican majority would have
permitted a fair and honest debate on this floor of the inheritance
tax, we would have enacted significant permanent adjustments that would
have solved the vast majority of the problems for 99.9 percent, I dare
say. But that is not to be.
Instead, we have been involved with a cynical process that we are
seeing played out here today. Nobody expects over the long haul that we
are, in fact, going to eliminate in its entirety the inheritance tax.
Our Republican friends have been involved with a roller coaster of a
10-year phase-out, and then insanely reinstating it in its entirety. As
a result nobody has been able to plan thoughtfully for the last 5
years.
My friend from Missouri says, well, on the one hand, it is only 1.5
percent of Federal revenues; but that is half of the problem of Social
Security that has driven some people into a frenzy. It is not an
insignificant number, in the neighborhood of $1.5 to $2 trillion over
the period of time we are talking about.
But my Republican friends do not want to allow the legislative
process to work, and have a permanent solution that will stop the
ambiguity and that will solve the problem for closely held businesses
and yet, not allow vast amounts of wealth, wealth that is so
significant that Bill Gates's own father does not think that it should
eliminate
[[Page H1936]]
the inheritance tax and has even written a book about it.
The gentleman from North Dakota has proposed not that we game the
system. The gentleman from Missouri (Mr. Hulshof) found out that his
parents, like 99 percent of the people, are not subjected to the
inheritance tax.
The Pomeroy amendment would immediately raise that threshold to $6
million, with further adjustments to $7 million in 4 or 5 years from
now, I forget the exact period of time; he will correct me, I am sure.
This brings it up so that 99.7 percent of the American public are
exempt, and it does it today. Not with games, not with promises but by
solving the problem. I think this is so important as I think of the
millions of Americans today that are struggling with the 1040 form, the
2.9 million Americans subjected to the alternative minimum tax, soon to
be 16 million families next year. Not enough money, not enough time to
solve that yet we are going to be involved with this cynical game of
the inheritance tax.
I strongly urge the adoption of the Pomeroy substitute, which will
solve the problem once and for all for the vast majority of the family
farms, the small businesses, and, in fact, a number of people of
significant wealth; and it will provide resources so that we can solve
problems like Social Security and the alternative minimum tax and be
about our business.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the gentleman just indicated that the Pomeroy substitute
solves the problem once and for all, and I have listened to a number of
individuals on the other side during the course of this discussion that
this is only going to affect the superwealthy and that really there are
no family businesses that are affected by the estate tax. It has been
interesting, because some of those comments have come from colleagues
of mine on the Committee on Ways and Means.
Mr. Speaker, we have had a number of hearings going back to at least,
from my memory, 1997. So I will mention some of these folks who have
come and testified in front of the Committee on Ways and Means.
Martin Whalen testified about his family-owned and -operated company,
Etline Foods Corporation, a distributor of food service products in
York, Pennsylvania. When they purchased the business, 48 employees; in
1997, 105 employees. Rhetorically, I would say to my friend from North
Dakota, will this solve their problem?
Wayne Nelson, a farmer from Winner, South Dakota. His father farmed
until his father's death in 1993. Their estate planning was inadequate.
Several parcels of land in South Dakota were liquidated in order to pay
the Federal tax. Will the substitute rectify that situation?
What about Roger Hannay of Hannay Reels, Incorporated, a small
manufacturer in the foothills of the Catskill Mountains about 25 miles
from Albany, New York, a small manufacturer employing 150 employees?
What about Richard Forrestal, Jr., a principal in Cold Spring
Construction, a firm specializing in highway and bridge construction?
What about Douglas Stinson, a tree farmer from Toledo, Washington,
that runs the Cowlitz Ridge Tree Farm? Each of these testified, Mr.
Speaker, that they were impacted negatively by the existence of the
death tax.
What about Carol Loop, Jr., president of Luke's Nursery and
Greenhouses, a wholesale plant nursery operation in Jacksonville,
Florida? He started his business with a $1,500 loan and a borrowed
truck. Would the problem be solved with the Pomeroy substitute?
Or Christopher and Kimberly Clements of Golden Eagle Distributors in
Tucson, Arizona. They lost their father unexpectedly after a valiant
bout with cancer. He lost his life at the age of 58.
Or Jeannine Mizell, a third-generation owner of Mizell Lumber and
Hardware Company of Kensington, Maryland.
What about Robert Sakata, a vegetable farmer from Brighton, Colorado,
or Jean Stinson, a railroad track manufacturing company in Barto,
Florida, running the R. W. Summers Railroad Contractors? Their family
had to shut down a facility in North Carolina, laying off two-thirds of
the 110 employees to pay the estate tax.
Or Jack Cakebread, founder of Cakebread Cellars in Napa Valley,
California. Would each of these individuals be solved or their estate
problems solved by the substitute?
It is a rhetorical question, and the gentleman from North Dakota (Mr.
Pomeroy) knows it, and I do not mean to put him on the spot, but he
cannot answer the question because when we draw a line, an arbitrary
line, wherever we draw that line, we still are going to have those
entrepreneurs that have been willing to invest in their businesses,
hire employees, build local communities; and as long as the death tax
remains in existence, they are going to have to do some sort of estate
planning.
I think it is much the better course to completely and finally
permanently repeal the tax.
Mr. Speaker, I reserve the balance of my time.
Mr. POMEROY. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, it is a privilege to carry this debate today on behalf
of the minority, and a privilege to participate with the gentleman from
Missouri, who is one of my favorite Members of the House. He has
presented his side very well.
He asked relative to a number of estates, would they be covered under
the Pomeroy substitute? Well, I believe that a number of them would
have their estate tax problems completely eliminated, because we take
the exemption and we double it. We go from today, a joint estate at $3
million, and we say, if you have a joint estate of $6 million, no
estate tax. We, like 2009, take that up to $7 million in a joint estate
circumstance.
So as to the question he asked, I do not know the particulars of
those cases, but I expect that a number, if not all of them are
covered, because 99.7 percent of the estates in this country are under
that amount.
But there is a feature of the majority proposal that is not
represented in our substitute, and I want to talk about it right now,
and this involves the imposition of capital gains liability at the
handling of an estate under the majority bill.
I can just imagine Members in the majority, some of them that might
have signed that ``no new tax'' pledge that was going around last
Congress, just wringing their hands because they are about to vote for
a tax increase, a tax increase in the form of capital gains taxation on
estates. Section 541 of the bill that the majority proposal would make
permanent reads this way: termination of step-up in basis at death. Tax
legalese, but what does it mean? It means new capital gains and capital
gains if you have an estate that exceeds that 1.3 gross value. You have
a reporting commitment that attaches at 1.3 gross value for estate.
{time} 1600
You know, it is the darndest tax bill I ever saw. Because, while they
talk about tax relief, they are hurting more than they are helping.
I direct you to this chart. Number of estates today with capital
gains issue, zero; and that is because the taxable basis in the
property is established at time of transfer in an estate. No capital
gains.
What happens under their proposal? Well, we know that there are
71,000 estates in the year 2011 that are likely to have reportable
amounts, in other words, gross valuation over $1.3 million. Some will
have a capital gains issue they have to pay. Some will not. But they
are all going to have to report with the IRS.
And this report is something else. It means going back in and trying
to establish what the value of the property was at the time mom and dad
acquired it. It is a nightmare. And that is well-established in the
Congressional Record. Because I have here the hearing, I have here the
Ways and Means record at the time the committee considered testimony to
repeal the carryover basis, the very provision they want to re-
establish in tax law.
You see, it passed once before, in 1976. It was delayed from
implementation and then repealed retroactively because of its
consequences.
Here is what some very interesting participants had to bring to the
committee. Carryover basis fosters an insidious bias against farmers
and ranchers. Carryover basis calculations for
[[Page H1937]]
land, buildings, machinery, livestock and timber have been described
as, at best, potential nightmares. Trying to establish what the taxable
basis on this is, which their law would require, is a nightmare. So
says the American Farm Bureau in their 1979 testimony.
The Cattlemen's Association, one touted as one of these that want to
re-establish capital gains on estates, they say, because of its
complexity, carryover base is impossible to comply with. It will
increase the tax burden and compound the illiquidity of estates of
farmers, ranchers and other family business operators who sell
inherited property in the normal course of business, and I quote, and
find it in the record from the National Cattlemen's Association.
NFIB also states, I strongly urge you, as an individual and as a
taxpayer and as one who professionally and through an association
represents small business people, repeal the carryover basis. So says
the National Federation of Independent Business, the very group that
they have cited as trying to re-establish carryover basis in the Tax
Code and put capital gains back on estates.
We have been here before. We do not want to do it again. Do you not
understand, voting for the repeal bill brings a new bill, a capital
gains bill, and a capital gains bill to thousands that have no estate
tax consequence?
So if you want to cast a vote this afternoon for a tax relief
proposal, vote the Pomeroy substitute. No capital gains in the Pomeroy
substitute.
Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
As the gentleman from North Dakota recognizes; and, again, I do not
think he meant to misspeak, but the underlying bill, H.R. 8, does
provide a step up in basis of $3 million for the surviving spouse and a
$1.3 million step up in basis for surviving heirs.
Mr. Speaker, many have worked on the death tax repeal and going back
even to the, I think, Family Heritage Preservation Act of 1993. The
gentleman from California introduced that bill and I think had 29
cosponsors. Now, of course, we are over 200 on permanent repeal.
Mr. Speaker, I yield 4\1/2\ minutes to the gentleman from California
(Mr. Cox).
Mr. COX. Mr. Speaker, the preceding speaker just told us that he does
not like the carryover basis. And I will tell you what. If his
amendment got rid of any aspect of carryover basis in death tax I would
vote for it. But this is a give-with-the-right-hand, take-away-with-
the-left-hand operation that he is proposing, because what he is also
doing is he is bringing back the 47 percent death tax.
We are trying to repeal the death tax, not bring it back; and you
cannot tell us that capital gains at 15 percent is worse than the death
tax at 47 percent.
And as the gentleman from North Dakota just mentioned, we do not have
a carryover basis in its entirety. We have simply a step up in basis
for both the spouse and for the children.
I wish we could get rid of the carryover basis. I would be thrilled
with that. But the Pomeroy substitute gives us the death tax back full
strength at 47 percent tax rate, and it arbitrarily says that a small
business that is worth $3 million is going to have to deal with this.
Now you have to ask yourself, in advance of your death, do you know
what the assets and inventory of your business is going to be 10 years,
20 years, 30 years down the road? The answer is no. Of course not. You
are going to have to do that tax compliance year in and year out.
Tax compliance, the cost of actual accountants and lawyers and life
insurance and all the other things that you have to do to deal with the
death tax year in and year out is $20 billion a year.
This tax, the death tax, kills between 170,000 and a quarter million
jobs each year, according to the Nonprofit Center For Data Analysis.
The death tax is a job killer. It is destroying family farms and
businesses. It is a drag on economic growth, and it is the greatest
disincentive to invest additional capital in family businesses in
America.
But the authors of this amendment still want to pry lots of cash out
of the cold dead fingers of America's deceased entrepreneurs. So they
rewrite the language of the Tax Code so we can keep all 88 pages of
complexity of the death tax and all the thousands of pages of
regulation and the hundreds of thousands of pages of case law that go
with it. This is the most complex part of one of the most complex tax
systems in the world, and it is time to drive a stake through its
heart. It is time for the death tax to die.
This is not the time to redefine the death tax or add legislative
language so that tax lawyers and accountants can have more to play
with. It is time to kill it. And that is why we must vote against this
amendment and in favor of the total repeal of the death tax.
Here is the message that this amendment, were it to be adopted, sends
to American workers: Do not work for a small- or medium-sized American
family business. Do not work for a large family owned business. To be
safe, do not work for any small businesses that are growing quickly or
picking up new customers or introducing new products. Because the
Federal Government has decided that the family businesses can grow
without the destructive burden of the death tax but only until some IRS
bureaucrat decides that these businesses are worth $3.5 million
dollars. Then the businesses will be subject to huge new tax burdens.
And guess what? You will not know until it is too late whether you are
on one side or the other side of that threshold.
I have to tell you, it sounds like $3 million is a lot of money. And
it is if you or I had it in our pocket. But for a business, counting
its real estate, its assets, its inventory, its trucks, that is a tiny
business indeed. And if you are trying to employ some people, you have
10, 11, 12 people that work for that business, what are you going to
say to them when they lose their jobs because the family business has
to be liquidated on the death of the entrepreneur in order to come up
with the actual cash to pay for it?
The IRS is not going to accept shares of stock in the family business
in payment of the death tax. They are going to say, go sell those
shares, go liquidate the business, go sell the assets in order to pay
off the tax plan.
To the supporters of this amendment I say we agree with you that the
death tax destroys family farms and businesses. Obviously, that is your
presumption if you are trying to have a threshold below which people
will not pay it. We agree with you that the death tax destroys family
farms and businesses, that it kills jobs and reduces economic growth.
So why do you want to keep this monster alive?
Please join with us and kill the death tax once and for all.
Mr. POMEROY. Mr. Speaker, I yield myself 90 seconds.
You know, anyone in the accountant or tax-planning profession
worrying about losing business because of the estate tax is going to be
smiling broadly at the end of tonight when we pass this re-creation of
capital gains tax and estates.
In fact, the ABA Task Force report devotes almost 70 pages to
discussing the problems that exist with the new carryover basis rules
in their legislation. The problems identified in the report include
unequal treatment of capital losses, difficulty in applying basis
adjustments to property sold during the administration of the estate,
treatment of property with debt and excessive basis, treatment of
installment loans, unequal treatment of pension assets, administrative
problems with allocation to spousal property, discrimination in favor
of spouses in community property states. Even a cursory examination of
that report leads to a conclusion that serious problems exist with the
new rules and that their surface simplicity is quite misleading.
Let us just walk through some of the titles, some of the titles of
the new capital gains law that they are going to have: Basis increase
for certain property; limit increased by unused built-in losses and
carryovers; spousal property basis increases; qualified terminable
interest property; definitions and special rules for application of
subsections (b) and (c); fair market value limitation; coordination
with Section 691; information returns, et cetera.
And to think that for every one taxpayer getting relief under their
proposal, an additional ten are now going to face this nightmare. It is
a funny way to give tax relief.
[[Page H1938]]
Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr.
Sherman).
Mr. SHERMAN. Mr. Speaker, I thank the gentleman from North Dakota for
yielding me this time and perhaps for mentioning what I see as the only
good part of this bill. You see, I am a CPA and tax lawyer by training,
and this bill is the full employment act for both my CPA friends and my
tax lawyer friends.
Republican after Republican has come to that microphone and talked
about the electrical tax, the sales tax, the telephone tax, the payroll
tax, the income tax, the marriage tax, the cable tax and the fuel tax.
And what is their solution? To eliminate a tax that applies to only
\1/4\ of 1 percent of America's families. Yes, that is right. They want
to keep the electrical tax, the sales tax, telephone tax, payroll tax,
the income tax, marriage tax, cable tax and the fuel tax.
They want to vote for a bill that takes $290 billion out of the
Treasury in its first 4 plus years and about $70 billion a year
thereafter and make it impossible for the Federal Government to ever
give any relief for those other taxes. It is a bill to shaft 99 and \3/
4\ percent of all American families.
But that does not stop there. Republican after Republican has come up
here and boasted how the passage of this bill will slash charitable
giving. So it is not just a loss to the Federal Treasury, it is a loss
to our hospitals and a loss to our universities, who are strangely
silent on this bill because they are afraid of angering \1/4\ of 1
percent of the families in the United States who happen to be a huge
chunk of their donors.
Let us look at the substitute. It is more fiscally responsible, costs
about \1/4\ as much, but it provides more tax relief for middle-class
families.
Let us look at this from the standpoint of a widow, a surviving
spouse. Under current law and under the Pomeroy substitute, no estate
tax, no capital gains tax and little or no compliance work. Under their
bill, more compliance work and sharp restrictions on the step up in
basis.
So this bill is an attack on working families, an attack on the
middle class, and an attack on widows. They have lost their spouse, and
now you want them to lose their step up in basis as well. These are
people who pay zero estate tax and get zero benefit from this bill.
They have lost a spouse, and that is the folks you go after. $290
billion in the first 4 plus years. It is part of an overall Republican
tax package.
I am on the International Relations Committee. We are waging a war on
terrorism. We turn to our men and women in uniform and say, stand ready
to make the ultimate sacrifice; and we turn to the richest families in
America and say, you should make a zero sacrifice.
Now these Republican tax policies have caused the President of the
United States to call into question our intent and ability to pay U.S.
government bonds.
{time} 1615
It calls into question our ability to pay our bonds.
Now, the President will not warn the Chinese investors. He wants them
to buy the bonds, but he has warned every Social Security recipient
that we may dishonor the U.S. Government bonds held by the Social
Security trustees.
This bill is part of an overall plan that keeps in effect the
electrical tax, the sales tax, the telephone tax, the income tax, the
payroll tax, the marriage tax, the cable tax, and the fuel tax. And it
is part of an overall plan that, well, I ought to write a commercial
because there is a lot of public policy commercials out there, and I
ought to write them for them.
Allowing corporations to avoid American taxes just by renting a hotel
room in the Bahamas, $8 billion. Allowing millionaires to pay virtually
nothing on dividend income, $80 billion. Eliminating the estate tax
even on the richest estates, $290 billion. Telling our soldiers in the
field that it is the billionaire families who are the ones who have
sacrificed too much for America, priceless.
And the Republi-card, accepted everywhere. The very wealthy want
their taxes released.
And do not forget the Deficit Express Card, now with a new $12
trillion credit limit.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, notwithstanding the gentleman's props, I would commend
to him for his reading leisurely ``The Economics of the Estate Tax: An
Update,'' a Joint Economic Committee study dated June 2003 which in
essence states the estate tax raises very little, if any, net revenue
because of distortionary effects of the estate resulting in income tax
losses roughly the same size as the revenue collected. Secondly, estate
taxes force the development of environmentally sensitive land. Through
2001, 2.6 million acres of forest land were harvested and 1.3 million
acres were sold every year to raise funds to pay the estate tax.
Regarding his criticism on philanthropy, the estate tax according to
the Joint Economic Committee study, the estate tax may actually be one
of the greatest obstacles to charitable giving as estate taxes crowd
out charitable bequests.
Mr. Speaker, I yield two minutes to the gentleman from Iowa (Mr.
Latham).
Mr. LATHAM. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, it is fascinating if you would think if there was a
proposal in the substitute to eliminate the whole list of taxes that
the gentleman referred to, but I have never heard one case where they
have talked about eliminating any tax, only increasing taxes. So it is
quite an interesting debate.
Let me just say, I come to this as someone who grew up in a family
farm operation, a family small business. I can tell you firsthand from
real life, honest experience the effect that the death tax has on
families and creating jobs and opportunities and being able to continue
what I believe is the American Dream, and that is to have an
opportunity for your children and your grandchildren to continue a life
that you love and cherish. Nothing stands in the way more for families
and small businesses to be successful, to continue, than the death tax.
We spend thousands and thousands of dollars every year as a way to
try and avoid what the death tax will do to us. It is morally wrong
that the day you die, your heirs should not only see the undertaker but
have to go see the tax man to see how much the Federal Government is
going to take away from a lifetime of work.
The idea, while the gentleman from North Dakota (Mr. Pomeroy), I have
the greatest respect for him, but the idea of continuing an immoral tax
that destroys family, destroys family businesses, I have seen neighbors
who have lost everything they have, lost generations of work on a
family farm because of the death tax. It is a fact that nothing is more
harmful, nothing is more hurtful than a tax that takes away the hope of
the American Dream.
This country is based on farms, on small businesses. That is the
lifeblood of this Nation, and nothing destroys it more than the death
tax; and that is why we have to kill this death tax to make sure that
we can experience the American Dream in this country.
Mr. POMEROY. Mr. Speaker, I yield 3 minutes to the gentleman from
Tennessee (Mr. Davis).
(Mr. DAVIS of Tennessee asked and was given permission to revise and
extend his remarks.)
Mr. DAVIS of Tennessee. Mr. Speaker, I thank the gentleman for
yielding me time.
Mr. Speaker, I rise today in strong support of the Pomeroy substitute
to House Resolution 8. And I argue that anyone in this body who is
currently concerned about our ballooning national debt should vote in
favor of the substitute.
The Pomeroy substitute is fair, and it covers those who need tax
exemption now, America's small businessmen and America's farmers.
It is clear from the debate today that the majority of Members in
this body believe that our farmers and small businessmen and -women
need relief from the estate tax, and I will do all I can to ensure that
these hardworking Americans get their due tax relief. In my opinion,
the Pomeroy substitute does this by increasing the estate tax exemption
level in 2006 by $3 million for individuals and $6 million for couples.
Additionally, from 2009 forward, the tax exemption level would be $3.5
[[Page H1939]]
million for individuals and $7 million for couples. This will fully
cover 99.8 percent, 99.8 percent of all the estates in this country.
Only two out of every 1,000 would not be totally covered.
I know my friends on the other side of the aisle desperately want to
make sure that the Paris Hiltons of America are fully covered, but they
have done pretty good the last 100 years; and I am sure under the
Pomeroy bill in the future they will continue to do pretty good.
Additionally, the substitute bill eliminates the liability for tax on
gains accrued before death. This is incredibly important to those
children who may decide to sell the small farms and businesses they
have just inherited. By using the stepped-up basis to calculate the
value on an estate at a time of death, the substitute bill is actually
making the Tax Code simpler and less cumbersome. It seems to me that
this is important to us. It is important to the President, and it is
important to many of us in Congress.
I will do all that I need to do in order to support estate tax relief
for farmers and small business owners in my district. But would it not
be a great message to send to the Senate and to the American people by
providing them with the estate tax relief they want and need without
breaking the bank? It seems to me that it is the fiscally conservative
thing to do. I truly believe we have got to stop this liberal policy of
borrowing and spending.
To my friends on the right who believe that any estate tax is so vile
that you took your polling advice and decided to start calling it the
death tax, you should read Leviticus 25 containing God's message to
Moses that every 50 years, called the Jubilee, all possessions must be
returned to the original owners. I invite you to read that scripture.
You had a chance in 2002 to increase the benefits by giving the tax
relief to the estates of all Americans. Why did you not? It clearly was
not to keep the budget balanced. Was it political? Every year around
tax time and every 2 years around election time, you come back with
permanent tax repeal. I think now is the time to do it. Let us get it
done.
The Pomeroy substitute bill is a bill we need to send to the Senate.
It is a fair bill. It is fiscally responsible. It should be the House's
bill.
Mr. POMEROY. Mr. Speaker, how much time remains on each side?
The SPEAKER pro tempore (Mr. Simpson). The gentleman from North
Dakota (Mr. Pomeroy) has 4\1/2\ minutes remaining. The gentleman from
Missouri (Mr. Hulshof) has 14\1/2\ minutes remaining.
Mr. POMEROY. Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from Georgia (Mr. Price).
Mr. PRICE of Georgia. Mr. Speaker, I thank the gentleman for yielding
me time. I thank the gentleman for his leadership on this issue.
I think it is important that we spend a moment or two and talk about
how we got here, why do we have a death tax and what is its
consequence; what is the fundamental we are talking about.
The death tax began in 1916 in order to fund World War I, a noble
cause but a cause that has long since passed. It remained through the
1920s and 1930s under the rationale that we should prevent the
accumulation of wealth, an issue more than addressed with our current
anti-trust laws.
The death tax has become a harmful relic of previous times. It
survives through the inertia of government and now has the consequence
of punishing hard work and success. It harms families, and it kills
small businesses.
Families should not have to visit the undertaker and the tax
collector on the very same day.
The death tax is fundamentally unfair and violates what should be our
principle of freedom and liberty and the imperative of personal
property rights.
Freedom and liberty demand that hard-working Americans be able to
leave their children and their grandchildren the results of their
diligence and their success and not have Washington get a windfall.
I urge all of my colleagues to act positively today on behalf of all
Americans and let the death tax die for good.
Mr. POMEROY. Mr. Speaker, in light of the imbalance of time, I would
be happy to have my friend from Missouri burn up a little more of his
time, unless he has no further speakers.
Mr. HULSHOF. Mr. Speaker, I have no further requests for time, and I
can assure my friend I will not use the entire 14 minutes to close.
Mr. Speaker, who has the right to close?
The SPEAKER pro tempore. The gentleman from Missouri (Mr. Hulshof)
has the right to close.
Mr. HULSHOF. Mr. Speaker, I reserve the balance of my time.
Mr. POMEROY. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman
from Illinois (Mr. Emanuel).
Mr. EMANUEL. Mr. Speaker, I rise in opposition to H.R. 8, which
continues, in my view, the policies by the majority of three tax cuts,
in 4 years, with four straight record-breaking deficits that have added
$2 trillion in 4 years to the Nation's debt. And here again the
majority offers $850 billion of tax cuts to the wealthiest families in
this country.
When you get in a hole that is $2 trillion deep, rule one, stop
digging. If you cannot figure that out, you cannot produce any more
when it comes to economic growth for this country or jobs or resolving
the health care crisis or the educational crisis we have in the
country. My view is repeating the same mistake and expecting a
different result is a sign that you have lost your bearings.
This bill will do nothing to stimulate the economic growth or
savings, which is what we should be focused on, rather than further
shifting the tax burden from wealth to work.
We could be debating and using this time on simplifying the code.
Just 2 weeks ago there was a report out by the IRS and others showing
that $350 billion a year goes unreported in taxes where people are not
complying and cheating.
We have a Tax Code that rewards and initiates a culture of cheating
and penalizes those who abide by the rules. That is where we should be
focusing, on simplifying the code and taking away the incentive to
cheat, which is what we have today in our code.
With all the economic challenges we are facing today in the area of
health care, energy, education, eliminating the estate tax, fully
eliminating, should be the last of our priorities. But the Republicans
will soldier on and continue to fight until taxes are eliminated for
the very last multimillionaire. Instead of helping the wealthy avoid
taxes, we should be helping middle-class families save for their
retirement.
That is a true deficit we have in this country, a retirement and
savings deficit. The savings rate is at its lowest level since the
1930s, lower than any other industrialized nation. Millions of families
are financially unprepared for retirement.
Given this reality, why are we debating the elimination of the estate
tax instead of real tax reform and a savings agenda for the middle
class.
Are holding the interests of the wealthy and special interests above
the hopes and dreams of the middle-class families the kind of values we
want our Tax Code to reflect?
As late former Supreme Court Justice Louis Brandeis once said, ``We
can have democracy in this country or we can have great wealth
concentrated in the hands of a few, but we cannot have both.''
Mr. Speaker, there is no doubt which one this bill will achieve.
Mr. HULSHOF. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Washington (Miss McMorris), a newly elected Member from the State of
Washington.
Miss McMORRIS. Mr. Speaker, I appreciate the opportunity to address
the House today on this very important piece of legislation, the repeal
of the death tax and making it permanent.
The repeal of the death tax is one of the first bills that I was
honored to place my name on as a cosponsor.
Growing up on a family farm in eastern Washington, I have seen
firsthand the negative impacts the death tax has on our families and
our businesses.
One of my top priorities in Congress is to grow jobs and expand the
economy in the Pacific Northwest.
[[Page H1940]]
{time} 1630
I believe that the repeal of the death tax will help accomplish this
goal, especially for the farmers and small businesses in my district.
The death tax costs thousands of jobs each year; and by repealing
this unnecessary tax, jobs will be created and many small business
owners will be able to add workers to their payrolls.
As a Member who represents a significant farming sector, I have seen
the death tax destroy some family farms. Without a doubt, death taxes
hurt our farmers and our ranchers by forcing family farms to sell land,
buildings or equipment needed to operate their business in order to pay
for this excessive tax. Some family farmers have had to take out a
second mortgage on their home to pay for the tax.
When farms and ranches shut down, so do the businesses they support,
leaving many out of work and leading to a depressed rural economy.
The time is now to end the death tax. I support the passage of H.R. 8
in order to end this unjust, unfair, and inefficient tax burden on our
families, businesses and especially our farming communities.
Mr. POMEROY. Mr. Speaker, I believe we are at the end of our time,
and I yield myself the balance of the time to close our side.
Mr. Speaker, I am feeling a bit like the man in the middle as we
approach this debate. There has been some on our side that suggests the
Pomeroy substitute provides too much estate tax relief. Indeed, the
amounts are higher than acceptable. Obviously, we have heard from the
other side they believe this is too low, but I would say to my friends
in the majority, and listen to this carefully, those who approach this
issue with an all-or-nothing mentality are likely to get nothing.
We cannot tell what is going to happen in the year 2010. None of us
know. Except there is one thing we know, and look at this chart, the
national debt is going to exceed $10 trillion, $10 trillion, 36 percent
above where we are at today, and this is based upon established budget
projections.
Do we really believe that that future Congress is going to sit
blithely by and let this become implemented? There is not a nickel's
worth of certainty in that. And we all know, because as damaging as
this is to the budget in the first 10 years, with $290 billion of
revenue loss, debt service added, this is a $326 billion hit to the
budget in the first 10 years, look what happens in the second 10 years:
$1.3 trillion impact in the second 10 years when we count the value of
the debt service.
Do any of us think that we are really going to allow this to happen
in the future years?
That is why I have advanced a very different alternative, entitled
certain and immediate estate tax relief, because it is certain and it
is immediate, and it deals by taking the estate tax to $6 million per
couple, $7 million per couple by the time we get to 2009. It deals with
the estate tax issues of 99.7 percent of the population.
Those of my colleagues looking at this chart may not be able to see
this tiny red line, because that is what three-tenths of 1 percent
represent with looking at the total population, three out of 1,000, and
we know that on average those estates are going to average $15 million.
So for three-tenths of 1 percent we offer an alternative that has no
capital gains, that is one-quarter of the cost, that immediately phases
in estate tax relief and is far and away the superior way to go. All or
nothing gets us nothing. Vote Pomeroy, immediate and certain estate tax
relief.
Mr. Speaker, I yield back the balance of my time.
Mr. HULSHOF. Mr. Speaker, I yield myself the balance of the time.
Let me first say, Mr. Speaker, how much I appreciate my friend from
North Dakota as we have done this in a number of sessions of Congress,
and I appreciate the tone, and he is a friend of mine, and I have a lot
of respect for him and the intent with which he comes to this debate.
Let me answer a couple of points that have been raised in particular,
first of all, about the tax simplification. Tax day is 2 days away, and
I am sure taxpayers, in particular small businesses and family farmers,
would appreciate anything that we can do to simplify our tax laws, and
I would submit that permanent repeal of the death tax does just that.
In fact, H.R. 8 is one simple paragraph, and it reads as follows:
``Section 901 of the Economic Growth and Tax Relief Reconciliation Act
of 2001 shall not apply to title V of such Act.'' Basically, we repeal
the sunset.
Now, again, the gentleman from North Dakota's (Mr. Pomeroy)
substitute, I counted, and I hope I am counting correctly, but 40
subparagraphs and directing accountants and the like to this
subparagraph or that particular paragraph.
The reason that we are here is because of complicated and arcane
Senate budget rules, called the Byrd rule, that we phase out the death
tax for one single year. In 2010, it magically disappears, and then on
January 1 of 2011 it springs back to life, and the uncertainty, how
would one as an estate planner advise a client when the tax is gone
today and comes back again in the very next year? By making death tax
repeal permanent, we give taxpayers the certainty they need to make
those long-term financial decisions.
The form itself, the blank form I am holding here, Form 706, is 40
pages in length for the estate tax return, 40 pages in length, and it
comes with a handy dandy 30-page instruction booklet. So when one is
talking about simplification, what better simplification would there be
than ripping these pages dealing with the estate tax completely out of
the Internal Revenue Code?
Lastly, when it comes down to the nuts and bolts of it, whether or
not the Pomeroy substitute, and again, in the effort to pursue the
American dream, whether those businesses are going to be shielded by
the Pomeroy substitute or not shielded, the fact is that as long as the
tax is on the books, as long as Congress draws some line in the sand,
and that is all we are doing with the substitute, is just some
arbitrary line, we are still going to have those family businesses that
are going to be taking some of their resources and these convoluted
schemes, legal, but efforts to avoid the tax.
Again, we hear a lot about these very high-profile individuals who
have been successful. I mean, this is the land of opportunity, is it
not? I would submit to my colleagues that the billionaires and the top
of the Fortune 500 lists, those folks have a stable full of lawyers and
accountants to create this intricate estate plan to thwart the estate
tax.
Not so, and I go back to the original discussion, that small family
in Columbia, Missouri, the Eiffert family who spends $52,000 a year
just to buy term life insurance because they might have to face the
estate tax. Under the current law, or probably even under the gentleman
from North Dakota's (Mr. Pomeroy) substitute, there is no certainty for
families like the Eiffert family.
So I salute my colleague.
The gentleman from Illinois (Mr. Emanuel), again a colleague of mine
on the Committee on Ways and Means, said, why are not we debating real
reform? Interestingly, there is a lot of discussion. I am not here to
advocate one particular tax reform proposal because we have got this
blue ribbon panel that is happening and looking at various options.
There is a lot of talk about the consumption tax, and yet it is notable
that, while there may be support for the idea of a general consumption
tax, the death tax, by contrast, is a tax on nonconsumption.
We talk a lot, too, about sin taxes. Why can we not put taxes on
alcohol or on cigarettes and the like and whether or not that generates
support among certain groups. This death tax is a tax on virtue. In
other words, if you work hard, you play by the rules, if you scrape
together your savings, and, again, we as an industrialized Nation, not
only do we have even under the Pomeroy substitute a 47 percent death
tax rate which would be the second highest in the world, but the fact
is that we are not very good at savings and investments. In fact, if
you are looking at your 1040 right now, look at line eight because it
says if you have been thrifty and you are able to generate a little
interest income, guess what, Uncle Sam says put this amount here
because we are going to take our bite of the apple.
Permanent repeal of the death tax actually rewards virtue.
Let me just paraphrase a column recently, actually it was some years
ago
[[Page H1941]]
but I think republished recently by Professor Edward J. McCaffery. He
is a professor who says this: ``As a committed liberal myself, I used
to believe that the gift and estate tax was essential to a just
society. But as a former estate planner and a scholar in both law and
economics, I confess that I was mistaken. The gift and estate tax is
quite simply a bad tax, even, and maybe especially, when viewed from a
liberal perspective.''
Professor McCaffrey goes on and says, ``This is not a supply-side
argument but a moral one. People who die with large amounts of wealth
have done three good things for society. They have exercised their
talents, rather than living a life of leisure. They have saved,
contributing to a common pool of capital whose benefits manifest, for
example, in lower interest rates, inure to all. And they have refrained
from spending all of their wealth on themselves.''
In fact, Professor McCaffrey across the Capitol some years ago I
think before the Senate Finance Committee said, to paraphrase
Scripture, the reason he changed his mind, I was blind but now I see.
If this comes from an unrequited liberal that the estate tax, the
death tax, is a bad tax, then I would suggest to all of my colleagues
here that it is time to permanently and completely repeal the tax.
Finally, I would say to my friend again, because there has been some
discussion about creating a new tax, as the gentleman knows, the intent
of H.R. 8, the underlying bill, is to help make it easier to pass a
family business from one generation to the next. As we have heard from
nonpartisan groups, 70 percent of family businesses do not make it to a
second generation, 87 percent of family businesses do not make it to a
third generation, and often the reason cited is because of this very
confiscatory punitive tax called the death tax.
The fact is that under H.R. 8, if it were to pass and become the law
of the land, the tax rate imposed at death on a lifetime of work and
thrift is zero percent. Under my friend's substitute amendment, the
rate imposed would be locked in at 47 percent.
Now I mentioned my personal experience, and I am running our family
farm. If a surviving heir chooses not to farm and then makes the
conscious decision to dispose of assets, then that is a taxable event,
but that is a purposeful decision made by the heirs of that family
business owner. It is not the Federal Government requiring the death of
a family member to be a taxable event.
So I would simply say to all of my colleagues that death should not
be a taxable event, period. Under the underlying bill of H.R. 8, it
would no longer be a taxable event. Under the substitute from my
friend, individuals above an arbitrary line drawn by this body, death
would continue to be an event that triggers the Federal death tax. That
is why prominent organizations such as the Chamber of Commerce,
National Federation of Independent Business, American Farm Bureau
Federation and a host of other small business coalition members,
representing the interest of small businesses and family farms across
the country, support H.R. 8 and oppose my friend from North Dakota's
substitute.
I urge a ``no'' on the substitute and a ``yes'' on the underlying
bill.
Mr. KIND. Mr. Speaker, I rise today in strong support of making
estate tax relief permanent so that family-owned farms and businesses
can be passed down from generation to generation. The estate tax should
be updated and modernized to reflect both the economic growth many
Americans have experienced in recent years, and the hard work of
millions of entrepreneurs and those just trying to make a living. These
businesses should not be punished for being successful or for simply
having their owners pass away.
The United States is the land of opportunity, encouraging free
enterprise and rewarding entrepreneurs. The estate tax should be
modified to protect family-owned small businesses and family farms from
the threat of having to be sold just to pay the tax.
But, Mr. Speaker, H.R. 8 would fully repeal the estate tax for all
Americans at a time when the administration is running record deficits
that threaten the futures of our children's children. As we all know,
the estate tax applies to fewer than 2 percent of all estates, about
50,000 a year. This bill would initially cost the Nation's treasury
$290 billion over 10 years.
This year alone, our budget deficit will exceed $400 billion. This
administration has turned a projected $5.6 trillion surplus over ten
years into deficits totalling $2.6 trillion. However, even with these
record deficits, we are debating yet another tax cut.
With the majority's policies leading our Nation toward a fiscal train
wreck, we should not be talking about totally repealing the death tax
and instead talk about doing something about the debt tax, which falls
upon all Americans.
Therefore, I am supporting the substitute being offered by my good
friend Mr. Pomeroy. His legislation will immediately help the small
businesses and family farms by increasing the estate tax exemption to
$3 million for individuals and $6 million for couples. This meaningful,
common-sense bill will exempt 99.7 percent of all estates from the
estate tax. Under current law, the tax basis for inherited property is
``stepped up'' to its value at transfer through 2009, which helps
farmers and small business owners who inherit property by reducing the
amount of capital gains taxes to which the property is subject. Under
current law, in 2010, ``carry-over'' basis rules (with a $1.3 million
exemption) replace the ``stepped-up'' basis rules, creating burdensome
new requirements and increasing the tax liability for many of these
property-owners. H.R. 8 makes this switch permanent and creates more
losers than winners. The Pomeroy substitute, however, will retain the
``step-up'' rules rather than the ``carry-over'' rules.
Mr. Speaker, it is our responsibility to avoid towering deficits and
reduce the debt future generations will inherit. We must give them the
capability and flexibility to meet whatever problems or needs they
face. I cannot, in good faith, support legislation that will put our
country further into deficit spending with a tax cut that will hurt
future generations for the unforeseeable future.
Mr. HULSHOF. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Simpson). Pursuant to House Resolution
202, the previous question is ordered on the bill and on the amendment
in the nature of a substitute offered by the gentleman from North
Dakota (Mr. Pomeroy).
The question is on the amendment in the nature of a substitute by the
gentleman from North Dakota (Mr. Pomeroy).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mr. POMEROY. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 194,
noes 238, not voting 2, as follows:
[Roll No. 101]
AYES--194
Ackerman
Allen
Andrews
Baca
Baird
Baldwin
Barrow
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boren
Boswell
Boucher
Boyd
Brown (OH)
Brown, Corrine
Butterfield
Capps
Capuano
Cardin
Cardoza
Carnahan
Carson
Case
Castle
Chandler
Clay
Cleaver
Clyburn
Conyers
Cooper
Costa
Costello
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle
Edwards
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Gonzalez
Green, Al
Green, Gene
Grijalva
Gutierrez
Harman
Hastings (FL)
Herseth
Higgins
Hinchey
Hinojosa
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick (MI)
Kind
Kucinich
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Lofgren, Zoe
Lowey
Lynch
Maloney
Markey
Marshall
Matheson
Matsui
McCarthy
McCollum (MN)
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Melancon
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Ortiz
Owens
Pallone
Pascrell
Payne
Pelosi
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sabo
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Schakowsky
Schiff
Schwartz (PA)
Scott (GA)
Scott (VA)
Serrano
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
[[Page H1942]]
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NOES--238
Abercrombie
Aderholt
Akin
Alexander
Bachus
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bass
Bean
Beauprez
Biggert
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boustany
Bradley (NH)
Brady (PA)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Carter
Chabot
Chocola
Coble
Cole (OK)
Conaway
Cox
Cramer
Crenshaw
Cubin
Culberson
Cunningham
Davis (KY)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Everett
Feeney
Ferguson
Fitzpatrick (PA)
Flake
Foley
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Gordon
Granger
Graves
Green (WI)
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hobson
Hoekstra
Hostettler
Hulshof
Hunter
Hyde
Inglis (SC)
Issa
Istook
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
Kuhl (NY)
LaHood
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McKeon
McMorris
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Murtha
Musgrave
Myrick
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Olver
Osborne
Otter
Oxley
Pastor
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pombo
Porter
Portman
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Royce
Ryan (WI)
Ryun (KS)
Sanders
Saxton
Schwarz (MI)
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (NJ)
Smith (TX)
Sodrel
Souder
Stearns
Sullivan
Sweeney
Tancredo
Tanner
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Westmoreland
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NOT VOTING--2
Gillmor
Jindal
{time} 1711
Ms. GINNY BROWN-WAITE of Florida, Ms. HARRIS, Mrs. DRAKE, and Messrs.
COX, FORTENBERRY, TERRY and GARY G. MILLER of California changed their
vote from ``aye'' to ``no.''
Messrs. OBEY, MEEHAN and TOWNS changed their vote from ``no'' to
``aye.''
So the amendment in the nature of a substitute was rejected.
The result of the vote was announced as above recorded.
Stated against:
Mr. JINDAHL. Mr. Speaker, on rollcall No. 101 I was inadvertently
detained. Had I been present, I would have voted ``no''.
The SPEAKER pro tempore (Mr. Simpson). The question is on the
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.
The SPEAKER pro tempore. 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. SABO. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 272,
noes 162, not voting 1, as follows:
[Roll No. 102]
AYES--272
Aderholt
Akin
Alexander
Bachus
Baker
Barrett (SC)
Barrow
Bartlett (MD)
Barton (TX)
Bass
Bean
Beauprez
Berkley
Berry
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boren
Boswell
Boucher
Boustany
Bradley (NH)
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burton (IN)
Butterfield
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardoza
Carter
Castle
Chabot
Chandler
Chocola
Clay
Coble
Cole (OK)
Conaway
Costa
Costello
Cox
Cramer
Crenshaw
Cubin
Cuellar
Culberson
Cunningham
Davis (KY)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Edwards
Ehlers
Emerson
English (PA)
Everett
Farr
Feeney
Ferguson
Filner
Fitzpatrick (PA)
Flake
Foley
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Gordon
Granger
Graves
Green (WI)
Gutknecht
Hall
Harris
Hart
Hastert
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Hinojosa
Hobson
Hoekstra
Hooley
Hostettler
Hulshof
Hunter
Hyde
Inglis (SC)
Israel
Issa
Istook
Jackson-Lee (TX)
Jefferson
Jenkins
Jindal
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Keller
Kelly
Kennedy (MN)
King (IA)
King (NY)
Kingston
Kirk
Kline
Knollenberg
Kolbe
Kuhl (NY)
LaHood
Larsen (WA)
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
Matheson
McCarthy
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McIntyre
McKeon
McMorris
Melancon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Otter
Oxley
Paul
Pearce
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pombo
Porter
Portman
Price (GA)
Pryce (OH)
Putnam
Radanovich
Rahall
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Royce
Ruppersberger
Ryan (OH)
Ryan (WI)
Ryun (KS)
Salazar
Sanchez, Loretta
Saxton
Schwarz (MI)
Scott (GA)
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Smith (NJ)
Smith (TX)
Sodrel
Souder
Stearns
Sullivan
Sweeney
Tancredo
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Towns
Turner
Upton
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Westmoreland
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wynn
Young (AK)
Young (FL)
NOES--162
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldwin
Becerra
Berman
Bishop (NY)
Blumenauer
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Carnahan
Carson
Case
Cleaver
Clyburn
Conyers
Cooper
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle
Emanuel
Engel
Eshoo
Etheridge
Evans
Fattah
Ford
Frank (MA)
Gonzalez
Green, Al
Green, Gene
Grijalva
Gutierrez
Harman
Hastings (FL)
Herseth
Higgins
Hinchey
Holden
Holt
Honda
Hoyer
Inslee
Jackson (IL)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy (RI)
Kildee
Kilpatrick (MI)
Kind
Kucinich
Langevin
Lantos
Larson (CT)
Leach
Lee
Levin
Lewis (GA)
Lipinski
Lofgren, Zoe
Lowey
Lynch
Maloney
Markey
Marshall
Matsui
McCollum (MN)
McDermott
McGovern
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Millender-McDonald
Miller (NC)
Miller, George
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Pomeroy
Price (NC)
Rangel
Reyes
Rothman
Roybal-Allard
Rush
Sabo
Sanchez, Linda T.
Sanders
Schakowsky
Schiff
Schwartz (PA)
Scott (VA)
Serrano
Sherman
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
NOT VOTING--1
Gillmor
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are
advised that 2 minutes remain in this vote.
[[Page H1943]]
{time} 1727
Mr. RUSH changed his vote from ``aye'' to ``no.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________