[Congressional Record Volume 156, Number 166 (Wednesday, December 15, 2010)]
[House]
[Pages H8514-H8517]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       KILLING THE AMERICAN DREAM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Iowa (Mr. King) is recognized until 
midnight.
  Mr. KING of Iowa. Mr. Speaker, and I would ask the gentleman from 
Missouri if he would mind sticking around here for a seamless 
transition into this dialogue. And I appreciate being recognized to 
address you here on the floor of the House. It is always my privilege.
  And I would pick this narrative up where it was left off in the 
transition component of it, and where I was, with 1,288 acres now 
required to sustain a unit of operation, that would be these acres, and 
a home place that was built with grain storage and transfer equipment 
and livestock facilities and those things that make it a system and a 
unit. Maybe some rented land out there, some rented pasture, some hay 
ground, some rented crop ground that keeps this system that is a viable 
and effective unit. And now, let's imagine that.
  Mr. AKIN. A couple tractors, combine, some equipment worth a lot of 
money.
  Mr. KING of Iowa. And let's say five kids. That is a good number. 
Five kids, and they are raised on this farm.
  Now, two sections of land, paid for, and the 90-year-old patriarch of 
this family has reached the end of his life and he is watching how his 
life's work that is the legacy of his predecessors, the life's work of 
almost a century of his memory adding all up to this point where, if he 
passes away in the first minute of next year, the taxman hovers over 
the death bed and reaches in and pulls out, aside from the $1 million 
exemption, 55 percent of the asset value.
  That means that half of the land that has been accumulated goes to 
pay the taxman. The other half of that land, the five children that 
would inherit the balance of what is left, would have a 20 percent 
equity share in the land that is left, 20 percent equity share in 45 
percent, roughly, of what was left. None of those children then, on 
that basis, have enough equity to hold that system, that unit, in 
place.

[[Page H8515]]

  And so they look at this and they would think, do I want to be in 
debt the rest of my life trying to retire this debt, trying to borrow 
the money to buy the section of land that it takes to pay the taxman 
and buy the 80 percent that is left that they don't have equity in, 
that goes to their siblings, and to be able to turn the cash flow to 
retire it to serve the interest and principal on those two sections of 
land? And the answer that they will come away with, and a rational 
banker will tell them: You can't hold this land. I am sorry, but you 
have got to put it before the auction, sell this land off, pay the 
taxman, and then distribute the rest of the proceeds amongst your 
siblings and you get your 20 percent that is left over after taxes.
  That means that a century of work, three generations or more that 
have compiled these assets, is gone, taken away, because of the class 
envy that comes from the leftists in this Congress and the people that 
think that the American dream isn't about building equity, and that you 
shouldn't be able to transfer wealth from generation to generation, and 
that somehow, because someone else worked and created the capital that 
this Nation thrives on, you should be punished in the transfer of that 
wealth into the next generation. The gentleman from Missouri knows 
this. I know this in the Midwest. They should know this all across 
America.
  Mr. AKIN. I appreciate your yielding for a moment, because what you 
are talking about, I guess economists would say, there is sort of an 
economic lot size. If you have a farm worth 2,000 acres, that may be 
viable; but if you have to sell off 55 percent of your land, 55 percent 
of your tractors or your combines or your equipment, and then you 
divide it across several siblings, it won't work anymore.
  So what you have done is not only have you taken away something that 
was part of the dream that somebody saved all their life to pass on to 
their kids; we are saying we are going to punish people who want to 
pass things on to their kids. That is not the American dream. That is 
killing the American dream.
  Now, you raised another thing, and I would like to talk about this. I 
have heard people, talk show hosts and others, talking about this, and 
I feel like they are not approaching it from the right way. You are 
talking about class envy, and it is always the upper class and the 
middle class and the lower class, and, ``I am for the middle class.'' 
And it is all this class, class, class stuff. And I feel like saying: 
Stop. Wait just a minute. I thought America was a classless society. I 
thought America was a place where you could come here dirt poor, end up 
as a millionaire, and nobody really made a whole bunch of stuff about 
that. They didn't tag you with, you can't go to dinner at somebody's 
house because you are not the right class. That is the way it is in 
Europe, but that is not the way it is in America. The America I know is 
classless. And I don't look down my nose at somebody doing a hard job, 
because the guy working hard is probably going to be the guy who is 
going to be the millionaire, he is probably going to be hiring my kid 
to mow his yard for him.

  So why do we talk about classes? Why don't we talk about jobs and the 
American dream? That is what I don't understand.
  Mr. KING of Iowa. The gentleman is completely correct on this. I 
would add to this point. Let's just say that a entrepreneur has a 
bright idea, and let's say 10 kids. That is a good start on a family, I 
tell them. And this bright idea from the entrepreneur starts a 
business, and they build their equity base because of the creativity 
and the energy and the conviction and the productivity and the 
competition that they put into the marketplace. This individual reaches 
that age of 45 or 50, and they can look ahead and say: I can check out 
of this. I can sell out my business and I can make the rest of this on 
really solid, stable investments, and I don't have to worry about the 
rest of my life. And, furthermore, if I continue to work, continue to 
take risk, continue to produce and expand the capital base of America, 
everything that I work for, for the rest of my life, is going to go off 
to the taxman to be redistributed among people across America, and I 
can't even give it to my children.
  What does a rational person do in a case like that? And I will submit 
to the gentleman from Missouri and the Speaker that a rational person 
would come to the conclusion that it didn't pay to continue to produce 
once you reach the level that you could take care of yourself for the 
rest of your life, because you couldn't pass it along to the next 
generation. That destroys the American dream, and it blows the entire 
thing up.
  I see my friend, the Judge and the gentleman from Texas, who 
concluded that legislating from the bench was the wrong thing, and 
coming to Congress to legislate from here is the right thing. And I 
yield to the gentleman from Texas.
  Mr. GOHMERT. I appreciate my friend from Iowa yielding. In fact, 
exactly what you are talking about was a real-life case in my extended 
family. There was a great aunt, predeceased by her husband. They had 
2,500 acres in south Texas. It had been built up over a number of 
generations, over 100 years. They have done exactly what you are 
talking about. They worked. And, by the sweat of their brow and all the 
sweat equity, scraping together money, they kept accumulating land and 
would pass that on.
  Well, along comes a greedy Congress that decides: When you are dead, 
we are going to do as our friend Ted Poe has talked about happened in a 
case tried in his court where a guy died in an accident, and a thief 
came in and stole his wallet out of his pocket while he was dead. Well, 
that guy went to prison for a long time because he was caught. Well, 
the government is doing that.
  Mr. KING of Iowa. And a place in eternity.
  Mr. GOHMERT. Exactly. Anyway, my great aunt's husband predeceased 
her. When she died, she had left a will that set aside one section of 
land to be sold to pay off the estate tax. Unfortunately, this was 
1986, and that also happened to be a time when FDIC and the SLIC, later 
the RTC, they started accumulating and they started dumping land around 
that area.
  Land had been valued around $2,000 at the time of her death in 1986, 
but within a year or so when the estate was being settled, because of 
the land being dumped in the area, it fell to $600, $700 an acre. The 
IRS took every acre of the estate, because at the time the land fell to 
$600 or $700. The IRS did allow a year or two extension hoping the land 
value would come back so they would get to save an acre or two. But out 
of 2,500 acres, it was around a $5 million estate at 2,000 acres, and 
there were some comparables around that when she died to show it was 
that value. But when it fell to $600, $700, the IRS said, ``It is all 
ours, because it will take every acre of land to pay your 55 percent 
estate tax even after the exemption.''
  They forced the sale of every acre of land, and her home, where she 
had designated specific bequests: I want you to have my china; I want 
you to have my crystal; I want you to have these beautiful pieces of 
furniture, you to have the table.
  Well, we got a cry from her immediate family, ``Please come, because 
the public is coming to this auction. The IRS is auctioning every 
single item from her home.''
  I was one of a number of family members, and we had an agreement 
between ourselves: If the individuals that she had specifically 
bequested things to were able to bid, we let them bid on those things 
and stayed back.

                              {time}  2350

  But it was heartbreaking to see item that Aunt Lilly loved after item 
she loved being bought by the general public who had come with lots of 
money to take aunt Lilly's things, all because a greedy Congress 
couldn't care less that they took every acre, they took her homeplace, 
and her heir that was willed the home had to buy her home. That is the 
IRS, and, of course, the IRS is nothing more than the designee of this 
Congress to go steal things from people, and we make it all legal by 
what we pass here.
  Morally, it is not right what we do in taking people's property, in 
prying their wallet from the dead carcass of someone because we can, 
because we have that power. It is not right.
  I can tell you, in my immediate family I will never be affected by 
the estate tax. Not in my immediate family

[[Page H8516]]

I won't be. But I know as a moral factor, it is wrong. It is just 
wrong. It is incentive killing.
  And speaking of Congress and the things we do, you know, we may be 
voting as early as tomorrow on this so-called tax extender bill. Leave 
it to this Congress to figure out a way, when people across America 
have said, hey, people across America didn't get a pay raise. Social 
Security, they didn't get a pay raise. They got no COLA. You guys don't 
get any COLA, you don't get a pay raise. And this Congress, the 
Democratic majority said, you are right, we are not going to get a pay 
raise. We hear you. We are not going to get a pay raise.
  But, you know what? In this tax extender bill we are going to cut 2 
percent off the Social Security tax. In other words, we are going to 
give ourselves well over a $2,000 raise next year if this thing passes. 
I mean, how ingenious was it for this Congress to come up with a way to 
get a pay raise, when we promised people we weren't going to do that 
this year?
  Mr. KING of Iowa. Well, I thank the gentleman from Texas.
  Reclaiming my time, I look at the configuration of this proposal that 
is coming to the floor tomorrow and I am troubled by it. There are some 
good things in it.
  To ensure that the current tax brackets can run for 2 years, that is 
a good thing. It is not as good as it needs to be. It mitigates the 
damage of the increase that is impending in the death tax, but it 
doesn't address and fix the problem. It just makes it less egregious. 
So those are the good things about it.
  I am one who supports the credits for ethanol and biodiesel. I could 
make that argument, and it is not a bumper sticker argument. But the 
Federal Government has said we want you to invest your private sector 
capital in producing renewable fuels, and if you will do that, we will 
make sure there is enough there to get you started.
  Well, they invested, at least in my district, 3 years in a row over 
$1 billion in renewable energy, and now we are looking at that rug 
being jerked out from underneath the people that trusted the Federal 
Government. We may or may not agree on that policy here, but I think 
the government needs to be consistent.
  But in any case, here is what we are really looking at: We need to 
make the current tax structures permanent. We need to eliminate and 
abolish the death tax, because it is an immoral tax.
  And into this bargain, what do we get? We get an increase in the 
death tax that goes from zero on up to a $1 million exemption with a 35 
percent tax, and that ax that is hanging over the head instead is a $1 
million exemption and 55 percent.
  The current tax is zero. George Steinbrenner's heirs paid zero in 
death tax, and those who pass away in this year pay zero, no matter 
what the amount of their equity. Actually, these are the goods things 
about this proposal.
  But the bad things are this: That the unemployment extensions that 
are there take it out to 99 weeks. We have gotten along for about three 
generations with 26 weeks of unemployment. We know that that bridges 
people over a seasonal job, it gives them half a year to find a job. 
And when you look at the time that people that are on unemployment 
spend to search for a job, it is about 20 minutes a day in the first 
weeks of their unemployment, and as that unemployment winds down into 
the 26th week, it is about 70 minutes a day that they spend looking for 
a job. They are far more likely to find a job the first week after 
their unemployment runs out than they are to find a job in the first 
week that their unemployment starts.
  So there is a huge transfer of wealth that takes place there, paid 
for out of borrowed money that comes from the Chinese, the interest and 
principal that is dumped on our children, and that is about $56.5 
billion that accumulated there.
  Then we have about $40 billion with the transfer payments. These 
transfer payments come in the form of refundable tax credits. 
Refundable tax credits is money that goes off budget, 100 percent of it 
is borrowed, and a lot of it from the Chinese, that pays people that 
are do not have a tax liability for the child care tax credit that is 
there and about two other credits that transfer wealth.
  You add this up, that is about $40 billion in that category, and 
$56.5 billion in the other category. So we are in the area of $101 
billion or $102 billion in transfer of wealth, before you get to the 
pay control component this, which troubles me.
  They lower the payroll tax by 2 percent on the employee side, but not 
on the employer side, which distorts the equation of a dollar out of 
the employee, a dollar out of the employer. And most of us see this as 
that is all money that is earned by the employee. As an employer, I 
will make that case. But when you distort the equation, then you are 
presuming that the employer is making money and the employee is not, 
and the favor goes to the employee side of this. It will take awhile 
for economics to balance that one out.
  But in the end, we have a 2-year extension of current tax structure 
for personal income tax, which if you think about it from a business 
perspective, if you have a business plan and a business model and you 
are going to invest capital in order to try to get a return on that 
capital, which means make some money, and in the process of doing that 
you create jobs, if you have a business model that has a 2-year ROI, 
return on investment, if you have got that kind of a business model, 
you have already invested that as fast as you could come up with the 
idea and come up with the capital to invest it. But most of this on the 
other side, most capital investments are 10 or 15-year returns on 
investment.

  So if you have got a 2-year extension and a tax increase on the other 
side of that, it doesn't release the capital in such a way that it is 
going to create the jobs. So we don't get anywhere near the kick out of 
this for our economy that some of the economists say that we do. And 
the day will come at the end of these 2 years, we are in the middle 
then of a presidential race, congressional races, House and the Senate, 
and the debate then engages again, do we do President Obama's Keynesian 
economics on steroids, do we continue and add to the $3 trillion in 
wasteful spending that has come from that? And they are going to say, 
well, we gave you your tax model for 2 years and it didn't work. 
Therefore, we need to go back to spending money like Morgenthau 
admitted was wrong.
  I yield to the gentleman from Missouri. I see we have 3 minutes left.
  Mr. AKIN. I appreciate your yielding. Certainly I think the point 
that you have said eloquently I tried to make earlier tonight, and that 
is what you are looking at here is not the Republican solution. It is 
not a good economic solution. It is not a good moral solution. It is 
something that is a Christmas-New Year's solution on something that 
people have seen for 3 or 4 years coming along, plenty of time, if we 
really wanted to deal with it.
  The other thing is that all of the discussion that I hear is so 
amazingly oblique to what we should be thinking. It is all about, well, 
does the middle-class guy get more? Does the rich guy get more? Does 
the poor guy get more? It is not about that. It is about America. It is 
about the fact that we have got an economic recession going. It is 
about the fact that we want the American dream to have some fresh life 
breathed into it and economic policies that don't rip people off. It is 
about the fact that socialism is theft. It is not a legitimate function 
under the Constitution or the government. It is about the fact that we 
want the government to be the servant and not the master.
  It is the time now for us to blow the whistle and say, enough 
already. It is time to get back to the system that was designed by our 
forefathers, and not this endless class warfare gibberish which misses 
the fact that we are USA Americans.
  Mr. KING of Iowa. Reclaiming my time, we have the 87 freshmen 
Republicans and however many Democrats are coming here who are the 
cavalry coming over the hill, and we ask them to bring the freshness of 
their convictions here and weigh in. I believe they need an opportunity 
to weigh in on this tax policy.
  I yield to the gentleman from Texas.
  Mr. GOHMERT. One of the things about this 13 months of unemployment 
insurance is that if people haven't

[[Page H8517]]

found a job already, rather than pay them not to work for over a year, 
train them to do a different job where there are jobs. That is the more 
caring thing to do.
  And one more comment about the tax policy that took all of my great 
aunt's land. I bought at the auction her music box that was a church 
that played Amazing Grace. At the end of the auction, most everybody 
had left, and the observation I had is there was nothing amazing or 
graceful about that policy.
  Mr. KING of Iowa. I thank the gentleman from Texas and the Speaker 
for his indulgence.

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