[Congressional Record Volume 161, Number 55 (Thursday, April 16, 2015)]
[House]
[Pages H2275-H2286]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEATH TAX REPEAL ACT OF 2015
Mr. SMITH of Nebraska. Mr. Speaker, pursuant to House Resolution 200,
I call up the bill (H.R. 1105) to amend the Internal Revenue Code of
1986 to repeal the estate and generation-skipping transfer taxes, and
for other purposes, and ask for its immediate consideration in the
House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 200, the
amendment in the nature of a substitute recommended by the Committee on
Ways and Means, printed in the bill, modified by the amendment printed
in part B of House Report 114-74, is adopted, and the bill, as amended,
is considered read.
The text of the bill, as amended, is as follows:
H.R. 1105
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 Act of
2015''.
SEC. 2. REPEAL OF ESTATE AND GENERATION-SKIPPING TRANSFER
TAXES.
(a) Estate Tax Repeal.--Subchapter C of chapter 11 of
subtitle B of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 2210. TERMINATION.
``(a) In General.--Except as provided in subsection (b),
this chapter shall not apply to the estates of decedents
dying on or after the date of the enactment of the Death Tax
Repeal Act of 2015.
``(b) Certain Distributions From Qualified Domestic
Trusts.--In applying section 2056A with respect to the
surviving spouse of a decedent dying before the date of the
enactment of the Death Tax Repeal Act of 2015--
``(1) section 2056A(b)(1)(A) shall not apply to
distributions made after the 10-year period beginning on such
date, and
``(2) section 2056A(b)(1)(B) shall not apply on or after
such date.''.
(b) Generation-Skipping Transfer Tax Repeal.--Subchapter G
of chapter 13 of subtitle B of such Code is amended by adding
at the end the following new section:
``SEC. 2664. TERMINATION.
``This chapter shall not apply to generation-skipping
transfers on or after the date of the enactment of the Death
Tax Repeal Act of 2015.''.
(c) Conforming Amendments.--
(1) The table of sections for subchapter C of chapter 11 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new item:
``Sec. 2210. Termination.''.
(2) The table of sections for subchapter G of chapter 13 of
such Code is amended by adding at the end the following new
item:
``Sec. 2664. Termination.''.
(d) Effective Date.--The amendments made by this section
shall apply to the estates of decedents dying, and
generation-skipping transfers, on or after the date of the
enactment of this Act.
SEC. 3. MODIFICATIONS OF GIFT TAX.
(a) Computation of Gift Tax.--Subsection (a) of section
2502 of the Internal Revenue Code of 1986 is amended to read
as follows:
``(a) Computation of Tax.--
``(1) In general.--The tax imposed by section 2501 for each
calendar year shall be an amount equal to the excess of--
``(A) a tentative tax, computed under paragraph (2), on the
aggregate sum of the taxable gifts for such calendar year and
for each of the preceding calendar periods, over
``(B) a tentative tax, computed under paragraph (2), on the
aggregate sum of the taxable gifts for each of the preceding
calendar periods.
``(2) Rate schedule.--
``If the amount with respect to which the The tentative tax is:
tentative tax to be computed is:.
Not over $10,000.......................... 18% of such amount.
Over $10,000 but not over $20,000......... $1,800, plus 20% of the
excess over $10,000.
Over $20,000 but not over $40,000......... $3,800, plus 22% of the
excess over $20,000.
Over $40,000 but not over $60,000......... $8,200, plus 24% of the
excess over $40,000.
Over $60,000 but not over $80,000......... $13,000, plus 26% of the
excess over $60,000.
Over $80,000 but not over $100,000........ $18,200, plus 28% of the
excess over $80,000.
Over $100,000 but not over $150,000....... $23,800, plus 30% of the
excess over $100,000.
Over $150,000 but not over $250,000....... $38,800, plus 32% of the
excess of $150,000.
Over $250,000 but not over $500,000....... $70,800, plus 34% of the
excess over $250,000.
Over $500,000............................. $155,800, plus 35% of the
excess of $500,000.''.
(b) Treatment of Certain Transfers in Trust.--Section 2511
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new subsection:
``(c) Treatment of Certain Transfers in Trust.--
Notwithstanding any other provision of this section and
except as provided in regulations, a transfer in trust shall
be treated as a taxable gift under section 2503, unless the
trust is treated as wholly owned by the donor or the donor's
spouse under subpart E of part I of subchapter J of chapter
1.''.
(c) Lifetime Gift Exemption.--
(1) In general.--Paragraph (1) of section 2505(a) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) the amount of the tentative tax which would be
determined under the rate schedule set forth in section
2502(a)(2) if the amount with respect to which such tentative
tax is to be computed were $5,000,000, reduced by''.
[[Page H2276]]
(2) Inflation adjustment.--Section 2505 of such Code is
amended by adding at the end the following new subsection:
``(d) Inflation Adjustment.--
``(1) In general.--In the case of any calendar year after
2011, the dollar amount in subsection (a)(1) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year by substituting
`calendar year 2010' for `calendar year 1992' in subparagraph
(B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $10,000, such amount shall be
rounded to the nearest multiple of $10,000.''.
(d) Conforming Amendments.--
(1) The heading for section 2505 of such Code is amended by
striking ``unified''.
(2) The item in the table of sections for subchapter A of
chapter 12 of such Code relating to section 2505 is amended
to read as follows:
``Sec. 2505. Credit against gift tax.''.
(3) Section 2801(a)(1) of such Code is amended by striking
``section 2001(c) as in effect on the date of such receipt''
and inserting ``section 2502(a)(2)''.
(e) Effective Date.--The amendments made by this section
shall apply to gifts made on or after the date of the
enactment of this Act.
(f) Transition Rule.--
(1) In general.--For purposes of applying sections 1015(d),
2502, and 2505 of the Internal Revenue Code of 1986, the
calendar year in which this Act is enacted shall be treated
as 2 separate calendar years one of which ends on the day
before the date of the enactment of this Act and the other of
which begins on such date of enactment.
(2) Application of section 2504(b).--For purposes of
applying section 2504(b) of the Internal Revenue Code of
1986, the calendar year in which this Act is enacted shall be
treated as one preceding calendar period.
SEC. 4. BUDGETARY EFFECTS.
The budgetary effects of this Act shall not be entered on
either PAYGO scorecard maintained pursuant to section 4(d) of
the Statutory Pay-As-You-Go Act of 2010.
The SPEAKER pro tempore. The gentleman from Nebraska (Mr. Smith) and
the gentleman from Washington (Mr. McDermott) each will control 30
minutes.
The Chair recognizes the gentleman from Nebraska.
General Leave
Mr. SMITH of Nebraska. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks on H.R. 1105, the Death Tax Repeal Act of 2015.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Nebraska?
There was no objection.
Mr. SMITH of Nebraska. Mr. Speaker, I yield myself such time as I may
consume.
I rise in support of repealing the estate tax. Repealing this death
tax is a top priority for Nebraska's farmers, ranchers, and small
businessowners--in fact, not just for Nebraska's farmers, ranchers, and
small businessowners but for these folks all around the country.
Agriculture, particularly raising cattle and crops such as corn, is a
land- and capital-intensive process. These Nebraskans aren't sitting on
piles of cash. In fact, their assets are the land and the equipment
they use to help feed our Nation and to help feed the world. They pay
income taxes on what they earn, and they pay high property taxes on the
land on an annual basis. They take great pride in this work and want
their children and grandchildren to continue in their livelihoods. They
shouldn't have to jump through hoops to ensure their descendants can
continue their work when they have passed on.
The death tax doesn't penalize the wealthiest Americans. In fact,
they probably don't even feel that penalty. They can plan their estates
and give away their wealth as they see fit. It penalizes those who have
worked all of their lives and who have reinvested in their family
businesses to ensure their families and neighbors have every
opportunity to be hard-working taxpayers.
I certainly urge a ``yea'' vote to grow opportunity in the U.S. and
to support that growing opportunity.
Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may
consume.
It appears that the bipartisan, good feelings of the last few weeks
are gone. After reaching across the aisle to pass important legislation
like the doc fix, my Republican colleagues are back to their old tricks
of handing out tax breaks to the few at the expense of the many.
Today's vote to repeal the estate tax is just the Republicans' last
attempt to tilt the U.S. Tax Code in favor of their ultrawealthy
campaign donors. This week's target is the estate tax--a tax, I would
mention, that was dreamed up by and championed by Teddy Roosevelt, who
is the same guy the Republicans like to hold up as one of the greatest
the party ever produced.
Their crusade to help the rich has gone too far. This proposed repeal
of the estate tax is nothing more than a massive, unfunded tax break
for a small sliver of America's wealthiest families, and, as is usually
the case with Republican tax policies, this repeal would do nothing to
help hard-working, middle class families.
In Nebraska, 52 households would benefit while there are 202,000
people living in poverty. The fact of the matter is that the estate tax
is only paid by about 5,400 families, or the top 0.2 percent of estates
in the country. Estates worth less than $5.4 million pay nothing. What
is the cost of providing a tax break to the top 5,000 families? It is a
quarter of a trillion dollars--$269 billion.
Now, these are the deficit hawks who were talking last week about
``we have got to worry about the deficit, the deficit, the deficit.''
Yet they are standing here with a straight face, putting $269 billion
more on the deficit. Instead, we should be using the money to extend
the child tax credit and the earned income tax credit, which are tax
credits that would actually help Main Street America--the real drivers
of the American economy. Or we could fund universal pre-K or build new
bridges and roads or provide free community college to 9 million
people.
My colleagues on the other side of the aisle will try and tell you
that the estate tax hurts family farmers. My colleague who began this
debate was talking about that, Mr. Speaker. They will tell you the
estate tax forces farmers to liquidate in order to pay the estate tax.
When pressed to provide examples, as we did, of family farms being
forced to liquidate, my Republican colleagues pointed to a 15,000-acre
farm they say had to be broken up for the estate tax.
Let me put that into context, as most people who live in the cities
don't know how big that is: 15,000 acres is the equivalent of 23.5
square miles. That is a 5-by-5 square mile farm. That is more than the
island of Manhattan. Manhattan isn't that big, and it is home to a
million people. I think most people who work hard would be hard pressed
to believe that 23 square miles is a family farm.
As families at the very top of the income scale experience
unprecedented wealth and prosperity--some may call it the second Gilded
Age--Republicans are helping the rich get richer. They want to talk
about ``We are going to help the middle class,'' but what are they
doing? They are shoveling a quarter of a trillion dollars out the door
to the richest. Repealing the estate tax will surely sow the seeds of a
permanent aristocracy in this country. We learned from Britain what a
permanent aristocracy gets you.
As we prepare to take this vote, I would ask my colleagues: Whose
side are you on? Are you on the side of working families and
communities across this country who are struggling to pay the bills, or
are you on the side of the ultrawealthy heirs who don't feel they need
to pay taxes on the millions and billions that they were handed by
their ancestors?
Wealth has never been taxed. That land and the accumulation of the
wealth in it has never been taxed. I vote for the working middle class,
and I hope that you will all vote ``no.''
I reserve the balance of my time.
Mr. SMITH of Nebraska. Mr. Speaker, I ask unanimous consent to allow
the gentleman from Texas (Mr. Brady) to manage the time for the Ways
and Means Committee.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Nebraska?
There was no objection.
Mr. BRADY of Texas. Mr. Speaker, I yield myself such time as I may
consume.
I thank the gentleman from Nebraska for his leadership on ending this
terrible tax.
[[Page H2277]]
Can you imagine working your whole life to build up a family-owned
business or a farm, and then, upon your death, Uncle Sam swoops in and
takes nearly half of what you have spent a lifetime building up for
your children and grandchildren?
Can you imagine this case, as my friend from Washington talked about?
This was a farm that had been in his family since the 1880s--five
generations. It didn't start that size--it started small--and they
built up over years and years and generations and generations. When the
young woman went back to Texas--she actually worked up here and went
back to Texas to settle her aunt's estate--she and her brother were
forced to sell off two-thirds of the farm that they had had for five
generations. They had to sell off two-thirds of it just to pay Uncle
Sam, just to try to keep some small portion of what their family had
worked so hard to build.
These are real life examples of how the death tax is the wrong tax at
the wrong time, and it hurts the wrong people. It is the number one
reason family-owned businesses and farms aren't passed down to the next
generations. It is at its heart an immoral tax, and it is an attack on
the American Dream, especially more so for our newest startups in
America--women- and minority-owned businesses that are building wealth
for the first time, hoping that they can create a nest egg, that they
can create a business for their children and grandchildren so that they
have greater opportunities in this great country.
I really want to thank my Democrat lead sponsor, Congressman Sanford
Bishop of Georgia, for his leadership to repeal the death tax and for
his belief that you shouldn't punish success.
I want to thank my colleague on the Ways and Means Committee,
Representative Kristi Noem; longtime champion, Congressman Mac
Thornberry; and a former colleague of mine on the Ways and Means
Committee, former Representative Kenny Hulshof, who carried this
legislation for so long.
The superrich don't pay this tax. They have a legion of lawyers and
tax planners, and they have charitable trusts and foundations. They
never pay this tax. These are family-owned, hard-working, risk-taking,
determined Americans who are building their businesses, their farms,
their ranches. These are not, as we will hear today, the Paris Hiltons
and robber barons of the Teddy Roosevelt days. These are Americans who
are often forced back to the bank for a loan or who are cruelly forced
to sell their land and businesses just to satisfy the IRS.
Death tax supporters will tell you this is all about income
inequality, but it turns out, according to a former Federal Reserve
Vice Chairman, with regard to income inequality only 2 percent is
related to what people inherit. In America, it turns out we do build
our prosperity. We pull ourselves up to prosperity. Some people say,
Look, this thing generates $200-plus billion.
Let me put this in perspective. For all of the damage it does to our
family-owned businesses and farms, the damage it will do to our women-
owned businesses and minority-owned businesses that are building
wealth, it will generate less than 2 days of Federal spending a year,
and it is declining.
At the end of the day, there is a basic question: Is this your money
and your hard work, or is this the government's money? Who has the
claim over all of the years you have spent working? Why, at the end of
the day, are we punishing success?
Let's give children and let's give our families their shot at the
American Dream and a better nation than the one, frankly, we inherited.
That is why, today, we rise to bury the death tax once and for all.
Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I would remind the gentleman from Texas
that 292 households in Texas will do nothing for the 4.4 million people
who are living in poverty in Texas.
I yield 3 minutes to the gentleman from California (Mr. Thompson).
Mr. THOMPSON of California. I thank the gentleman for yielding.
Mr. Speaker, I rise in strong support of estate tax reform and in
strong opposition to this wrongfully and inaccurately titled Death Tax
Repeal Act.
Whenever you hear people say ``death tax,'' know right away that they
are not talking about public policy and that they are not talking about
tax reform--they are talking about politics. There is no such thing as
a death tax. You won't find those words anywhere at all in the Tax
Code. It is partisan jargon. After you die, you don't have to pay
taxes. You don't have to take out the garbage. You don't get called for
jury duty anymore. When you are dead, you are dead. So there is no such
thing as a death tax.
Today, my Republican colleagues are pursuing a full repeal of the
estate tax under the guise of helping family farms and small
businesses. I wish this were the case, but the rhetoric is simply
disingenuous when you look at the policy.
I agree that the estate tax is a real issue for family farmers and
for ranchers. The first bill I introduced when I came to Congress was a
bill to reform the estate tax. Folks in my district, where farmland
values have reached as high as $300,000 an acre, are often land rich
and cash poor.
{time} 0930
There are middle class people who work their land every day and pay
taxes on the income they earn from that work. They are not people who
the majority's bill is designed to help. Their full repeal is not the
answer. It costs too much money. It is not paid for--$269 billion not
paid for--and it helps people who don't need the government's help.
A more commonsense and targeted approach would be to pass the bill
that I referenced earlier. My bill exempts farmlands and related assets
from estate tax as long as the family that inherits the farm continues
to farm the land. If they stop farming the land, then the tax kicks
back in. This is a fair and equitable response to the issues many
farmers are facing today: a shortage of young farmers because the
barriers to entry are too high and the high volume of farmland we are
losing. More than an acre of farmland is lost every minute of every
day.
It is important that we help farmers preserve farmland for future
generations, which will benefit our food supply and our environment,
but it needs to be done the right way. So once this political exercise
is over, I hope we can get down to business and work together on a
proposal that is actually aimed at protecting our family farms and our
family-owned small businesses.
Mr. BRADY of Texas. Mr. Speaker, I yield myself 15 seconds.
I know the gentleman from California is sincere, but his approach was
tried before. It failed so miserably to protect farms, it was repealed,
I think, 3 years later. No more gimmicks. Let's actually help these
family-owned farm businesses.
I yield 2 minutes to the gentleman from Wisconsin (Mr. Duffy), a
gentleman who understands the importance of family-owned farms and
businesses and rewarding success.
Mr. DUFFY. I appreciate the gentleman yielding.
Mr. Speaker, I come from America's dairy land, the central and
northwestern part of Wisconsin, and we have a lot of small dairy
farms--300, 500, maybe a thousand acres of small family farms. This
death tax, when Dad dies, isn't paid by Dad because he is gone, but the
kids who inherit the farm are the ones who pay that tax, and they end
up not being able to pay it. So what do they do? They sell to the
corporate farm. Repealing the death tax is the ability to keep the
American family farm and not transfer these farms to the big corporate
conglomerates. If you want to stand with the little guy, let's repeal
this thing.
But it is not just farms. I have a family in my community in
Wisconsin that employs hundreds of families. They are a manufacturer. A
family-owned business. They asked me not to use their name, but they
understand that this tax, if two or more of them die at the same time,
they can't pay it, and so what they would be forced to do is sell the
business, which would more than likely mean that they are going to lose
these jobs to some other part of the country or some other part of the
world. So now this family, because they love their community, they love
the people that work in their company, many for 20 and 30 years, what
they won't do is they won't travel together, they won't fly together,
they won't drive together, because God forbid, if there were an
accident and two of them die, they have to sell a major employer
[[Page H2278]]
in our community. They don't travel together, family members, because
of this tax.
I hear my friends across the aisle talk about this helping the big,
wealthy guy. I agree with the gentleman from Texas who has done such
great work on this bill. They don't pay this tax. They don't pay. They
have great lawyers, great estate planners. It is the guys in the middle
that are employing folks in their community that pay this tax; and when
they have to pay it, that means jobs for middle class Americans.
I think we should all stand up in this House, and we should stand
with the middle class Americans, the middle-income Americans, and let's
work to repeal this bill to make sure that we have a vibrant,
prosperous, middle class in America.
Mr. McDERMOTT. Mr. Speaker, I would like to remind the gentleman from
Wisconsin that 63 households will benefit in his State. There are
618,000 people living under the poverty level. That is $18,000 for a
family of four.
Now, one of the things about these kinds of debates is the political
rhetoric gets a little overheated. If you die and you have this great
big business, you have 5 years to pay that tax. You don't have to pay
it the day that they bury the body of your grandfather or your mother,
your father, whoever. You have 5 years to pay it or to decide on it,
and 10 years deferred. So you have got 15 years before that tax has to
be paid. It isn't like somebody shows up at the house when you are
having the reception after the funeral and says, ``Here, give us the
money, or we are taking your property.'' That is not what happens in
this country. We have laid it out to give people time to figure out how
to do it financially. Anybody who has that much money probably has
enough money to actually hire a financial consultant, it would seem to
me, Mr. Speaker.
I now yield 2 minutes to the gentleman from New Jersey (Mr.
Pascrell).
Mr. PASCRELL. Mr. Speaker, I have heard better stories in the Bada
Bing Club in New Jersey. I am listening to the accounts of all of these
poor people. Let me tell you what we are talking about here.
Do you see this big chart? That is 99.85 percent that get nothing out
of this legislation in the United States of America. Here is 0.15
percent that get a $270 billion tax cut. Here, let me use the
magnifying glass and get a better picture of how much we are talking
about. You can all see that orange slash right there.
You are telling me that this helps the common good? My friends on the
other side of the aisle--and when I use the word ``friends,'' I mean
it--recently have taken to talking about the lack of wage growth in
this country, yet here we are today considering legislation that will
add, Mr. Speaker, $294.8 billion to the deficit for people who don't
work at all.
This whole idea that the estate tax hurts middle class Americans in
income that has already been taxed is simply not true. Much of this
income has never been taxed. Repealing the estate tax in full would
result in a massive tax cut for the wealthiest of the wealthy. It hits
5,500 households in this whole country--never mind Texas, the whole
country--with estates worth more than $5 million. I mean, that is the
law. I am not making this stuff up as I go along.
This bill only further exacerbates our already upside-down Tax Code.
Our Tax Code is already stacked against hard-working labor income, and
this bill would make it even worse.
I sit on the House Committee on the Budget as well as the Committee
on Ways and Means.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McDERMOTT. Mr. Speaker, I yield an additional 1 minute to the
gentleman from New Jersey.
Mr. PASCRELL. After sitting through 13 hours of our budget markup, I
could tell you that this $294.8 billion goes a long way in making up
for the devastating cuts that the other side of the aisle has inflicted
on the middle class.
It is also important to note that the budget does not assume, Mr.
Ranking Member, the repeal of the estate tax. Where the heck are they
going to get the $294.8 billion? It assumes a revenue-neutral--I like
it when they say it--a revenue-neutral reform. It assumes that revenues
will be exactly what CBO projects under current law for the next 10
years.
We really have only two conclusions: either this bill is directly
contrary to the budget, or it is not paid for today. Congress will, at
some point, have to sit down and go down the road, pass a tax hike to
pay for this massive deficit-financed tax cut. You have no choice. You
can't have it both ways.
I would like to hear from my good friend, the chairman, what his path
will be to make up for this $294.8 billion. That is a lot of money, Mr.
Speaker. Where the heck is it coming from?
Mr. BRADY of Texas. Mr. Speaker, I yield myself 10 seconds.
I would point out studies show we would generate more money by
repealing this tax than keeping it because people wouldn't put their
money into tax shelters and other things and instead would put it back
in their business into job creation.
I am proud to yield 2 minutes to the gentleman from Pennsylvania (Mr.
Kelly), a leading member of the Committee on Ways and Means and a
gentleman whose father started their business by the sweat of his brow.
Mr. KELLY of Pennsylvania. I thank the chairman for yielding me this
time.
Mr. Speaker, it is interesting to sit and listen to the rhetoric. I
think sometimes if you drink the purple Kool-Aid long enough, you start
to believe it.
That chart is a great chart that was just up there because what we
are doing again is we are starting to separate America. We are saying
that because it only applies to this very little sliver that we have to
go after these people.
I want you to think about something. The entire produce of a woman's
or man's life after they have paid their local taxes, their State
taxes, their Federal taxes, all the sales taxes over their life and the
way they have contributed to build their communities, at the time of
their death--now, I know we don't want to call it a death tax, but it
is triggered at the time of their death. God forbid these hard-working
American taxpayers are allowed to pass on to the next generation that
which they were able to accumulate.
Now, the chairman made a reference to my parents, and it is not just
about my parents. My dad was a parts picker in a Chevrolet warehouse.
He married the girl who ran the switchboard at that warehouse. That was
my mother. He went off to World War II. He came back home, started with
a little car dealership in Verona, Pennsylvania, one-car showroom, four
service bays. He built it into something he was very proud of and was
able to pass on to my brothers and me.
Now we want to go after these folks not because they were successful,
but because they died and because the government cannot live within its
means. So when we go to the viewing, we go to the funeral home and we
go to pay our respects, we are also telling them: Thanks for all your
hard work. You did a great job. You contributed so much, and now the
government wants to take some of that produce of your entire life
because they can't live within their means. You lived within your
means. You tightened your belt when you had to. You made more with
less.
But no, that is not good enough because we can't rein in spending, so
we can't stop taxing. That is egregious in the United States of America
to sit back and look at all those who have done so much and paid so
many taxes in their lifetime, and yet to say upon their death they are
not allowed to pass this on to the next generation.
I love the chart because you really specify exactly what has been
going on here for too long. You are separating the country. You are
dividing the country, rich versus poor. This is America.
The SPEAKER pro tempore. Members are reminded to direct their remarks
to the Chair.
Mr. McDERMOTT. Mr. Speaker, I hope you would remind the gentleman
that the country is already divided into rich and poor. There is no
question about that. In Pennsylvania, 144 households will get the
benefit, and 1.57 million people in Pennsylvania live in poverty. So
there is already a bit of a division here.
It might be more acceptable if this bill recouped all the money that
we spent in farm subsidies over time.
[[Page H2279]]
Maybe when people die, they ought to give their farm subsidy back to
the government. When my grandfather died, the State of Illinois came
back to get the public assistance money that had been given to him
during his life, his last years.
I yield 2 minutes to the gentleman from Wisconsin (Mr. Kind).
Mr. KIND. I thank the gentleman for yielding me this time.
Mr. Speaker, I rise in opposition to this legislation, and perhaps
for no better reason than it is a $270 billion cost that the
Congressional Budget Office showed with no pay-fors, no offsets in the
Federal budget. If my Republican colleagues want to move forward on
this policy proposal, at least they should show courage to the American
people and tell them how they are going to pay for this $270 billion
bill or to admit that it is just going to be added to the annual
structural budget deficits, a completely fiscally irresponsible
approach to trying to reform our Tax Code. Lord knows we need to get to
work on that.
But there is a larger point--and to speak to the last speaker's point
that he just made on the floor--what is somewhat problematic and
troublesome for me, it seems many of our Republican colleagues seem
very comfortable with the idea of income inequality in this Nation,
which is only growing worse. But here is the main point: this income
inequality in our society, absent opportunity, absent hope, absent
mobility, is just a caste system. It is just a caste system where birth
determines outcome.
That is why one of the richest people in the world, Warren Buffett,
who opposes repealing the estate tax, says that our fate in life should
not depend on whether we win the birth lottery or not. It is no longer
good enough for the other side to continue to deliver tax relief to the
wealthiest 1 percent; now it has got to be the wealthiest two-tenths of
1 percent, because that is what this legislation affects is two-tenths
of 1 percent of the wealthiest households in America.
But they keep saying: Don't worry. We will address the deficit later.
They say we have a spending problem in Washington. But what we have
seen from their budgets, where they go for offsets in spending: it is
in Pell grants; it is in workstudy; it is in GEAR UP and TRIO programs;
it is the broadband expansion that we need in this Nation; it is the
basic research funding that has to take place; it is the infrastructure
modernization that we need.
{time} 0945
It is those things that we need to be investing in to keep America
competitive, and those are the type of programs that help with
mobility, that help with opportunity for many Americans.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McDERMOTT. I yield the gentleman from Wisconsin (Mr. Kind) an
additional 30 seconds.
Mr. KIND. I thank my friend.
That is what is so onerous behind this legislation. They have become
very clever at piling up debt, convincing the American people we have a
spending problem; yet the very programs they decide to target in their
budget resolutions are those programs that provide upward income
mobility for all Americans.
I am a product of that. I am a kid who went on to school with Pell
grants, with student loans, with the workstudy program. There is no way
I want to be a Member of Congress that is going to pull up the ladder
behind me and say ``tough luck'' to the lower income classes of this
country.
That is what this bill leads to, and I encourage my colleagues to
oppose it.
Mr. BRADY of Pennsylvania. Mr. Speaker, I yield myself 15 seconds.
I would say let's have the courage to stop hiding behind Warren
Buffett, George Soros, the superrich. They don't pay this tax. They
have lawyers and tax accountants and tax finders. They have charitable
trusts. This is family-owned farms and businesses.
I am proud to yield 1 minute to the gentleman from Texas (Mr.
Williams), a second-generation small-businessowner.
Mr. WILLIAMS. Mr. Speaker, in 1939, a man started a car dealership to
realize the American Dream. When he died, the ownership of the business
was passed along to his son and so was a death tax liability equal to a
significant value of the business' worth.
The IRS was there 3 days later after the father's death, wanting the
money, 50 percent of the value of the business. His son nearly declared
bankruptcy. Fortunately, he was able to pull resources together to keep
his family's profitable dealership afloat and save jobs. He still runs
the dealership to this day and has more than 100 employees. That son is
me.
Mr. Speaker, today, the House will vote to repeal the death tax, the
most unfair double taxation on job creators we have ever seen. The
death tax is a tax on savings that have already been taxed on before,
but the tax provides less than 1 percent of Federal revenue.
According to the Tax Foundation, repeal of the death tax would boost
GDP, create 139,000 jobs, and eventually increase Federal revenue. That
is right. Ironically, by killing the death tax, the U.S. Government
would earn more money and more opportunities.
Mr. Speaker, many second-generation businessowners do not have the
means to hire teams of accountants and lawyers to navigate the costly
obstacles to save the family farm and save the family business.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. BRADY of Texas. I yield the gentleman an additional 15 seconds.
Mr. WILLIAMS. As a small-businessowner of 44 years, I have seen
friends and colleagues lose gains earned from a lifetime of hard work
because of Washington's greed and failed policies, like the death tax.
We must repeal this unfair policy that does no good to the Federal
Government and does life-changing harm to American job creators and
families. We must make sure this law goes away.
In God we trust.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, I rise in strong opposition to this Brady
``Borrow to Benefit Billionaires Act.''
I don't believe that it is in the interest of our country to borrow
another $269 billion from the Chinese, the Saudis, or whomever we can
get it from in order to benefit about 5,000 or so of the wealthiest
families in this country, and that is precisely what this legislation
does.
``If ever our people become so sordid as to feel that all
that counts is moneyed prosperity, ignoble well-being,
effortless ease and comfort, then this Nation shall perish.''
``No advantage comes either to the country as a whole or to
the individuals inheriting the money by permitting the
transmission in their entirety of the enormous fortunes which
would be affected by such a tax.''
Those are bold words of a different kind of Republican than we have
today. They are the bold words in 1907 of President Teddy Roosevelt
when he originally proposed the tax that has been mislabeled today as
the ``death tax.''
President Roosevelt thought that it would be the death of our country
if we had a permanent leisure class elite of the type that dominated so
many European countries. He thought that a reasonable tax on
inheritance of the wealthiest, most prosperous members of our country
would be in the national interest--indeed essential to the future of
the country.
I think his approach was right at the beginning of the 19th century,
and it remains true in this century because this is really a
billionaire protection act.
When he introduced this legislation, Mr. Brady said: What kind of
government swoops in upon your death and takes nearly half of the nest
egg that you've spent your life building?
Well, the answer is not the American Government. Our government does
not do that and does not touch the estates of any but the smallest,
smallest fraction of the wealthiest--about 5,000-plus households in the
country.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McDERMOTT. I yield the gentleman from Texas (Mr. Doggett) an
additional 30 seconds.
Mr. DOGGETT. I am concerned about the anticompetitive effects of this
bill because, while this money could be used to address the size of our
national debt--and that might be an appropriate place for it. Think
about the size of $269 billion and what it could do. We know that our
infrastructure is crumbling. That would be more than enough
[[Page H2280]]
to cover, over the next 10 years, the shortfall that has been estimated
in dealing with our transportation infrastructure.
Think what dollars of that size would do for strengthening of the
competitiveness of our workforce from pre-K to postgrad.
It is a bad investment to help those who have already got what they
have got.
Mr. BRADY of Texas. Mr. Speaker, I am proud to yield 1 minute to the
gentleman from Montana (Mr. Zinke), a fifth-generation proud resident
of his State.
Mr. ZINKE. Mr. Speaker, I rise to bring awareness to a pervasive tax
that threatens the very livelihood of the future of generations of
Montanans, the death tax.
April 15 was tax day; and, while some Americans look forward to a
refund, many families in my home State and across the Nation are
reminded of the looming debt their children and grandchildren will
face.
The death tax jeopardizes the future of 28,000 Montana farms and
thousands more small, family-run businesses. This is not a leisure
class. These are hard-working Americans that spent their whole life--
generations--building their future, only to see it threatened.
This tax punishes Americans that have worked hard, played by the
rules, and want to pass that legacy on to their children. The death tax
is a tax on the American Dream.
I am a proud cosponsor of H.R. 1105, the Death Tax Repeal Act of
2015, and I urge my colleagues to support this measure in order to
preserve the American Dream for farmers and small ranchers.
Mr. McDERMOTT. Mr. Speaker, I hope you will remind the gentleman from
Montana that he is talking about 19 families in Montana, when you have
got 145,000 people who are living below the poverty line.
I yield 2 minutes to the gentleman from California (Mr. Becerra).
Mr. BECERRA. I thank the gentleman for yielding.
Mr. Speaker, it could be very confusing trying to understand what is
going on. I see in today's gallery a lot of young Americans--our future
leaders--and they are probably wondering: Is this something that might
affect me in the future?
Because I think everyone in America has this dream, this hope that
our country makes available of making it in America, we all aspire to
do well.
I know my parents--my father didn't get more than a sixth grade
education--aspired to see their kids do more. I know they are very
proud of what their children have been able to accomplish.
Make no doubt, we all want to make sure that we make it in America.
We all want to make sure that we have what we need to buy that first
home, to send our kids to college, to save up enough for retirement.
Most Americans would say: I have made it. That is the American Dream.
If I can guarantee those things and know my kids are going to have an
opportunity to be better than me, that is great. Can I do more? I would
love to do more.
I don't think that most Americans say that we have to give a tax
break not to the wealthy, not to the megawealthy, not to the ultra-
megawealthy, but to the uber-mega-ultra-superwealthy, a tax break that
would cost all us taxpayers $270 billion because this bill is not paid
for when, at the same time, that $270 billion would pay for the same
amount of coverage for the entire National Institutes of Health to do
all the research that we expect it to do to help us cure Alzheimer's,
Parkinson's, diabetes, lung cancer, and heart disease.
All that research that the National Institutes of Health is doing
with all those great scientists and all those universities today in
America costs for 10 years the same amount that this bill would cost to
give not 1 percent of the wealthiest--one-tenth of 1 percent of the
wealthiest Americans--a tax break that costs $270 billion.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McDERMOTT. I yield the gentleman an additional 30 seconds.
Mr. BECERRA. Every time a proponent of this measure gets up and says,
We want to protect the family farmer, they have to say, Well, we mean
the one-tenth of 1 percent of the wealthiest Americans who may be a
family farmer.
I guarantee you that guy is not going to have callouses on his hands
if he is a family farmer, and he is one-tenth of 1 percent of the
richest Americans.
Let's be real. We have priorities. We want to make it in America. We
want to buy that house; we want to send our kids to college, and we
want to be able to retire securely.
You don't have to be the one-tenth of 1 percent richest Americans, at
the cost of $270 billion to all the other Americans, especially every
one of those folks sitting in this gallery today, to say we have got to
give a tax break to the uberwealthy.
Let's not vote for this bill.
I see in the gallery of this Chamber tomorrow's leaders. They have
dreams and they have priorities for their future.
The American people are pretty straightforward about what their
priorities are.
Having the opportunity to buy our own homes, send our kids to
college, and having a secure retirement are parts of the American dream
that we all aspire to.
Thanks to the decisive actions taken by Congressional Democrats and
President Obama during the Great Recession, our economy is on the
rebound: Over the last 61 straight months our economy has created over
12 million jobs, the longest consecutive period of job growth on
record. Wages have grown by over 5% over the last year. The high school
graduation rate is at an all time high.
Despite these gains, for too many families the American dream is
still out of reach.
Congress's number one priority should be to build on this foundation
to boost wages and economic growth. It should be to strengthen
investments in the middle class. It should be to ensure our tax code
and economic policy rewards hard work, not just wealth.
The legislation we are considering today does none of these things.
It won't benefit any middle class Americans. It won't make
investments in our education or our infrastructure, it won't create
ladders of opportunity into the middle class, and it won't put the
American dream within reach for working class families.
Instead, this legislation is a special giveaway to the wealthiest
estates.
At a time when the wealthiest 1% of Americans hold more than 40% of
the nation's wealth, it would widen the wealth gap even further.
And we're not even talking about ``the 1%'' today--the group that
benefits from this legislation is even more exclusive.
This bill would only benefit uber-mega-ultra-super wealthy estates.
This bill would give a mere fraction of the richest 1% estates a
special tax break of over $3 million each, and leave working class
families to pick up the tab.
This bill only benefits fewer than 2 of every 1000 estates and costs
$270 billion. What other investments could be made with this money?
100% of school nutrition programs, which provide nutritious meals to
31 million children every day; 100% of Social Security survivor
benefits, 3/4 the cost of providing Pell grants to more than 9 million
students a year over the next 10 years; 31 times the funding for Head
Start for FY 2015; 39 times the funding for the Centers for Disease
Control and Prevention for FY 2015; 104 times the funding for the Food
and Drug Administration for FY 2015.
Health Care: You could fund NIH's budget for 2015 9 times over. FY
2015 estimates: 461 times NIH Alzheimer's funding, 394 times NIH breast
cancer funding, 50 times NIH general cancer funding, 894 times NIH
stroke funding, 265 times NIH diabetes funding, 1929 times NIH
Parkinson's funding, 221 times NIH heart disease funding.
The bottom line is that this bill fails to help the middle class get
back on their feet.
It doesn't make it easier for the hardworking small business owner
and it doesn't make it more affordable for a hardworking family to send
their kids to college.
It's time for Congress to get to work and ensure that we put the
American Dream within reach for every American, not just the wealthiest
few.
The SPEAKER pro tempore. The Chair would remind Members to avoid
references to occupants of the gallery.
Mr. BRADY of Pennsylvania. Mr. Speaker, I yield myself 15 seconds.
For those listening today, young people included, ask yourself a
question: Do you want a government that guarantees you food stamps and
welfare checks or an opportunity to build your American Dream?
At the end of your life, all the years of hard work, all the sweat,
all the sacrifice, do you want to pass that down to your kids and
grandchildren? Or should Uncle Sam swoop in and take
[[Page H2281]]
nearly half of everything you have worked a lifetime to earn?
I am proud to yield 2 minutes to the gentleman from Minnesota (Mr.
Paulsen), a key member of the Ways and Means Committee.
Mr. PAULSEN. Mr. Speaker, we all love hearing about American success
stories. It might be that startup that begins with an idea, a couple of
dollars, and a lot of hard work that grows into a business that can
support a family, that serves a community, and provides for the future.
Many family-businessowners, ranchers, and farmers do hope to keep
that success going by passing it on to the next generation.
However, for too many, the dream of taking over the family business
can quickly turn into a nightmare. While having to cope with the loss
of a loved one, relatives are often forced to make tough decisions in
order just to meet the estate tax obligations under law.
It can mean taking on large amounts of debt. It can mean selling off
critical assets. It can mean even closing down the business and being
forced to sell the entire family farm or business just to pay the taxes
alone.
The truth is that average Americans can be negatively affected by
this tax. Not only are businesses not being passed down to the next
generation, but they are also being forced to lay off other employees
that are currently employed. When a small business shuts its doors and
then lets those employees go, it can have a very profound affect on the
community.
Farmers can be impacted by the Federal estate tax simply based on the
value of the farmland alone. That doesn't even take into account, Mr.
Speaker, the buildings, the equipment, the livestock, and other
nonliquid assets that are present.
I spoke to a Minnesota family business who was forced to be spending
20 percent of their net income on an expensive life insurance just to
fund their future death tax obligations. That is money that is not
being used to expand and grow the current business.
We have to ask ourselves, Mr. Speaker, for a country that prides
itself on the American Dream that we all agree on and the idea that our
children will be better off than we were: Does it make sense to
penalize success?
I ask for support for this legislation, and I commend the gentleman,
Mr. Brady, for his leadership.
{time} 1000
Mr. McDERMOTT. Mr. Speaker, may I know the time that is remaining on
both sides?
The SPEAKER pro tempore. The gentleman from Washington has 9\3/4\
minutes remaining, and the gentleman from Texas has 15\1/4\ minutes
remaining.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Danny K. Davis).
Mr. DANNY K. DAVIS of Illinois. Mr. Speaker, I rise in opposition to
this bill that would add hundreds of billions of dollars to our deficit
to deliver a windfall to the heirs of the wealthiest estates in the
country.
Although the Republican budget holds that we must make draconian cuts
to domestic programs in the name of fiscal prudence, cuts that harm the
elderly, the working poor, the infirm, the middle class, the Republican
leadership lauds a bill that would provide inequality in our Nation and
give an average tax break of $3 million to the most secure.
In my congressional district, the median income is $48,841. The
unemployment rate for African Americans is 24.5 percent. The poverty
level for children is 38.3 percent, the poverty rate for the elderly is
21.4 percent, and over 63,000 households receive food stamps.
In the State of Illinois, over 13,000 children are homeless. At the
end of last year, Chicago had the fifth-highest foreclosure rate in the
Nation.
This bill is fiscally irresponsible and reflects misplaced priorities
for our Nation. We can make improvements to the bill to address the
concerns of small businesses and family farms if current law is
inadequate, but wholesale repeal reflects poor leadership.
The fiscal recklessness of the Republican approach that balloons our
deficit by hundreds of billions of dollars via dozens of tax cuts
reminds me of the adage that says ``death by a thousand cuts,'' only
this time it is debt by a thousand tax cuts. Debt by a thousand tax
cuts is bad for our economy, it is bad for our citizens, and it is bad
for our Nation. I will vote ``no.''
Mr. BRADY of Texas. Mr. Speaker, I am very proud to yield 2 minutes
to the gentlewoman from South Dakota (Mrs. Noem), a key member of the
Ways and Means Committee.
Mrs. NOEM. On March 10 of 1994, my dad was killed in an accident on
our family farm. I was taking college classes at the time. I was 21
years old, and I ended up coming home with my family and trying to
figure out how we were going to get by without him after this tragedy
hit our family.
All I could hear during that point in time were the words that my dad
had said to me for many years. It wasn't very long after he was killed
that we got a bill in the mail from the IRS that said we owed them
money because we had a tragedy happen to our family.
One of the things my dad had always said to me is, ``Kristi, don't
ever sell land, because God isn't making any more land.''
But that was really our only option. We could either sell land that
had been in our family for generations, or we could take out a loan. So
I chose to take out a loan, but it took us 10 years to pay off that
loan to pay the Federal Government those death taxes.
That is one of the main reasons why I got involved in government and
politics, because I didn't understand how bureaucrats and politicians
in Washington, D.C., could make a law that says that when a tragedy
hits a family they somehow are owed something from that family
business. And it doesn't work for normal, everyday people.
That is why this death tax is so unfair because, at one of the most
vulnerable times of people's lives, the Federal Government says, We
need to take what you have and what your family has worked for.
A lot of the conversation today has been about that the rich need to
pay more. Well, the rich will avoid this tax. They have the resources
to do that. But it hits families like mine harder than ever. The rich
certainly are not going to pay the burden of this tax.
I will also say that some of the discussion has been about the
deficit. The government does not earn money. The government takes other
people's money, is what it does. It certainly is not going to earn more
money by this policy.
This previous administration and the members of the other party here
on the House floor today talk about the people who have struggled. We
have more people living in poverty today under your policies than we
had before you were in charge of this country.
One in 15 children are on food stamps because of the policies of this
administration. Fifty percent of our college students can't find work
or are underemployed because of the policies of this administration. We
talk about income inequality, and we are seeing it because of those
previous policies.
This tax is a very unfair tax. It is double taxation. Please don't
put any more families in the situation where they lose their family
operation or are threatened by it because of a tragedy that happens to
their family.
Mr. McDERMOTT. Madam Speaker, I reserve the balance of my time.
Mr. BRADY of Texas. Madam Speaker, I am proud to yield 2 minutes to
the gentleman from Missouri (Mr. Smith), another new member of the Ways
and Means Committee who understands just how fragile these family-owned
farms and businesses are.
Mr. SMITH of Missouri. Madam Speaker, growing up and working on my
great-grandfather's farm, I learned many values. One that I was taught
is a comparison and, basically, when you are out there working with the
hogs, you learn that there is little value in hogwash.
I would compare a lot of the facts that we have been hearing today,
that are opposing this legislation, as equivalent to hogwash. And I say
that under the stipulation that I have heard numerous facts stated of
farms the size of 15,000 acres.
Well, the average family farm in this country is less than 500 acres.
If you look at the Bootheel of Missouri, which I represent, every farm
in that area, if you would just consider a 500-acre farm and the price
of a 500-acre farm, times that by how many acres they have--say, 500
acres times $10,000. That's $5 million--$5 million.
[[Page H2282]]
Then you have to put the price of a combine and a tractor to harvest
the rice and the cotton. Guess what? They are part of that top 2
percent that the other side says is the wealthiest of the wealthy.
Well, guess what?
Less than 2 percent of Americans are farmers. Less than 2 percent of
Americans are farmers. This legislation, this tax is directly after
farmers.
Our Tax Code, what is wrong with it, it is disadvantaging rural
America, and the death tax is part of that disadvantage. You are seeing
people leave rural America because of the Tax Code, and this is a way
to fix the Tax Code.
When you look at family farmers, 85 percent of their investment is in
the land and in the equipment. It is not in liquid assets. And when
they get a tax bill, like the Congresswoman from South Dakota who spoke
mentioned, they have to either sell their land or they have to take out
a loan so they can keep their family business. This is a tax on the
American Dream, and this is awful.
The folks on the other side of the aisle have never found a tax that
they disliked. Folks, we have to stop this.
Mr. McDERMOTT. Madam Speaker, I reserve the balance of my time.
Mr. BRADY of Texas. Madam Speaker, I am proud to yield one 1\1/2\
minutes to the gentleman from Washington (Mr. Reichert), the leader of
the Select Revenue Subcommittee on the Ways and Means Committee.
Mr. REICHERT. Madam Speaker, I thank the distinguished gentleman from
Texas for bringing this bill to the floor and for his hard work on this
bill. I appreciate the opportunity to speak today in support of this
bill. I am proud to be a cosponsor.
The story is the same across this country in all of our districts,
whether you have heard that today from every Member or not.
Businessowners and farmers work hard for their entire lives with the
goal of passing on the first fruits of their labor but face the
sometimes insurmountable hurdle of the death tax. And, in addition to
the actual tax liability the death tax imposes, merely planning for it,
regardless of whether these businesspeople and farmers end up owing it,
it is yet another challenge.
Last month, when I chaired the hearing in the Select Revenue
Subcommittee on this bill, we heard from three witnesses: a rancher, a
farmer, and a product distributor. Their stories were the same. This is
an onerous tax, creating hours and hours and months of work by
attorneys and by their own employees trying to figure out how they are
going to keep their business in their family.
One businessowner said, for the first 26 years working in his family
business--26 years he spent trying to figure out how to meet the death
tax. When one relative was about to pass away, they had another death
tax issue they had to address. Another relative was about to pass away
and did pass away, and again they had to address the death tax.
This is an issue that the other side wants to make between the rich
and the poor. This is about average American men and women,
businessowners across this country trying to keep their family-owned
business and protect their hard work.
Mr. McDERMOTT. Madam Speaker, I reserve the balance of my time.
Mr. BRADY of Texas. Madam Speaker, I yield 3 minutes to the gentleman
from Georgia (Mr. Bishop), the lead sponsor of the Repeal the Death Tax
Act, an Eagle Scout, Army veteran, key member.
Mr. BISHOP of Georgia. I thank the gentleman for yielding.
Madam Speaker, I am pleased to join Representative Brady on this
important bipartisan legislation to repeal the death tax once and for
all. I have always believed that the death tax is politically
misguided, morally unjustified, and downright un-American. It is really
a tax on success.
The assets that people want to pass on to their progeny have already
been taxed. If it is a business or if it is a farm, the individuals who
earned it, who started the business, they paid income taxes. If it was
a corporation, the corporation paid taxes also.
Why should it be taxed a third time just to be passed on and just to
keep the business together?
It undermines the life work and life savings of farmers, small- to
medium-sized businesses in Georgia and all across the Nation.
We have all heard the statistics. The United States has the fourth-
highest estate tax in the industrialized world at 40 percent. Only
Japan, South Korea, and France have higher death taxes. Thirteen
countries have repealed their taxes since 2000.
It has a disproportionate impact on African Americans. A study by the
Boston College professors John Havens and Paul Schervish several years
ago estimated that between 2001 and 2055, the death tax will erase
between 11 percent and 13 percent of all African American wealth. This
one tax alone will cost African American households between $192
billion and $257 billion.
Some people have argued that the estate tax is no longer a serious
problem since we have permanently raised the exemption to $5 million
for individuals and $10 million for couples to index it to inflation.
Nothing can be further from the truth.
According to the Georgia Farm Bureau, the exemption is barely keeping
pace with increasing farmland values. In fact, the number of farms in
Georgia with building and land values of over $5 million rose from 664
to 677 between 2007 and 2012.
I just can't stand by and allow this estate tax to continue to punish
family-owned businesses in Georgia and throughout the country. It is
not just farmers.
We have heard a lot about farms, but look at funeral homes, funeral
directors who have multiple locations with rolling stock, caskets,
limousines, hearses. That amounts to a pretty good amount of money.
I have got constituents who own radio stations; finally, worked hard
enough to have a family-owned business that would be able to be in
communications. They started out with one radio station. Now they have
got five stations in three different States.
It is a family business. The husband, the wife, and now the three
kids went to college, law school, and they are running the business. It
is a shame that they would have to sell that business and, ultimately,
have to lay off employees to pay the 40 percent estate tax.
It is clear that the estate tax really hurts the economy.
The SPEAKER pro tempore (Ms. Foxx). The time of the gentleman has
expired.
Mr. BRADY of Texas. I yield the gentleman an additional 30 seconds.
Mr. BISHOP of Georgia. A study by the Tax Foundation found that
repealing the death tax would increase U.S. capital stock by 2.2
percent, it would boost GDP, and it would create 139,000 jobs, which
eventually increases Federal revenue.
This is a tax on success. It is not a big contributor to the revenue
of this country. It is a very, very--a drop in the ocean really, and
so, it is time to repeal it.
I urge my colleagues to really think realistically, not
ideologically, and just do the right thing. I urge you to join my
colleagues and repeal the death tax once and for all.
{time} 1015
Mr. McDERMOTT. Madam Speaker, I yield 2 minutes to the gentleman from
New York (Mr. Rangel).
Mr. RANGEL. I thank the gentleman for this opportunity.
Madam Speaker, having served on the Ways and Means Committee for
decades, it is a little bit embarrassing to see us debating a bill that
goes nowhere. This is a political action that is taken by the majority
to select provisions that are in the Tax Code and to have those of us
that advocate tax reform to just select those parts that appear to be
very popular with some parts of our constituencies.
There is nobody in this House that truly believes that this
legislation, if passed, ever would become law, but it is something to
be used in political campaigns as to what you voted for and why you
voted against it.
The truth of the matter is that, to listen to the other side talk, we
have some very, very rich farmers; and just because they are in a
family doesn't mean that they are not wealthy.
First of all, let's go to the video, let's go to the facts, and let's
find out how many people are going to be affected. And the statistics
show that 99.8 percent of the population, those people who die, don't
pay any taxes. So what
[[Page H2283]]
the heck are we talking about? We are talking about a few rich people
that are 0.2 percent of those people that will be eligible for a tax,
and that is only after we estimate that the value of their estate is $5
million for one person and $10 million for two.
So I am not saying that for these people it is not going to be
inconvenient. But when you think about the number of people that pay
taxes, that are working hard every day, that are trying to save money
for their kids' education, then this really means that hundreds of
billions of dollars are being set aside for those people that already
have.
If we really want equity, if we really want fair play, why don't we
take a look at the entire Tax Code? Why are we just looking at the
estate tax or the local and State tax? Because equity is how much money
are you raising and how much money do you need.
General Leave
Mr. BRADY of Texas. Madam Speaker, to clarify, I ask unanimous
consent that all Members may have 5 legislative days to revise and
extend their remarks and include extraneous material on H.R. 1105, the
Death Tax Repeal Act of 2015.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. BRADY of Texas. Madam Speaker, I am proud to yield 1 minute to
the gentleman from Indiana (Mr. Stutzman), a fourth-generation farmer.
Mr. STUTZMAN. Madam Speaker, I rise today in support of H.R. 1105,
the Death Tax Repeal Act.
I want to thank Chairman Brady and Chairman Ryan for their leadership
in addressing this issue that is so important for my district in
Indiana and for many folks all across the Hoosier State.
In Indiana, under the leadership of Governor Mike Pence, we
officially repealed our State's death tax in 2013, and with this bill
we can do the same thing on the Federal level.
As a fourth-generation farmer, I can see how family-owned businesses
already struggle each year with a destructive mess that is our Federal
Tax Code. The death tax, which is a double tax on Americans' hard work,
only adds to the problem. It stifles prosperity, and it prevents
individuals and families from making the personal decisions they want
to make with their savings and their property for generations to follow
them.
Madam Speaker, it is time to repeal the death tax. Only accounting
for a fraction of a percent worth of annual revenue for the Federal
Government, let's call it what it really is: it is a distorted attempt
to redistribute the earnings of Americans' hard work.
With that, I strongly urge my colleagues to support this commonsense,
bipartisan legislation.
Mr. McDERMOTT. Madam Speaker, would you tell us the time left on each
side?
The SPEAKER pro tempore. The gentleman from Washington has 5\3/4\
minutes remaining. The gentleman from Texas has 5\1/4\ minutes
remaining.
Mr. McDERMOTT. I yield 2 minutes to the gentleman from Oregon (Mr.
Blumenauer).
Mr. BLUMENAUER. I appreciate the gentleman's courtesy in permitting
me to speak on this.
Madam Speaker, it is ironic. This week, we have had hundreds and
hundreds of businesspeople, folks from organized labor, contractors
coming to town, pleading with Congress to get its act together and
enact a 6-year comprehensive transportation bill. We have been frozen
in place for years, with 23 short-term extensions because this Congress
can't figure out how to provide the resources necessary to deal with a
critical situation.
America is falling apart and falling behind, yet we are caught here
in an inability to provide resources to help rebuild and revitalize
America. That is part of the issue.
Today my Republican friends have discovered that there is $270
billion of revenue that somehow the Federal Government no longer needs.
They have decided to give an additional tax cut to people who need the
help the least. And, ironically, for all the talk about this being a
death tax and double taxation, the vast majority of the wealth that
will be untaxed has never been taxed in the first place. You don't get
to be a billionaire on W-2 income. It is appreciated capital. But we
are going to, in their judgment, give a windfall.
We have had this tax for over a century from Republican
administrations, but we are going to turn our back on it because we no
longer need $270 billion while we continue to shortchange America. We
are having construction projects stopped this summer because the short-
term fix for the transportation bill is going to expire.
This is lunacy. It is not fair.
Mr. BRADY of Texas. Madam Speaker, I am proud to yield 1 minute to
the gentleman from east Texas (Mr. Gohmert).
Mr. GOHMERT. Madam Speaker, several years ago, there was an author
who wrote a book about millionaires in America; and it was amazing,
most of the millionaires built a business, built a farm, and the number
one most commonly driven vehicle by millionaires in America was a Ford
F-150 truck. They were workers.
There was a time in America when we looked around and we saw somebody
work 16 hours a day, like my aunt and uncle did, and build together a
farm and we were proud of them. Well, my Aunt Lilly died, and the FDIC
dumped land out by her place before the land could be sold. So the IRS
came in and eventually sold every acre of her land.
The family was called in. Let's try to at least buy some of her
assets from her home, her little modest home. I bought this music box
from Aunt Lilly. It plays ``Amazing Grace.'' But she didn't get amazing
grace. Her heirs didn't get amazing grace. They ran into the amazing
greed of the United States Congress.
Let's take the green-eyed monster and put it where it belongs and
begin to feel good for people that have worked for what they own.
Mr. McDERMOTT. Madam Speaker, may I inquire if the gentleman from
Texas is ready to close.
Mr. BRADY of Texas. Madam Speaker, I have one further request for
time.
Mr. McDERMOTT. I reserve the balance of my time.
Mr. BRADY of Texas. I am proud to yield 1 minute to the gentleman
from Texas (Mr. Hurd).
Mr. HURD of Texas. I thank my colleague for yielding.
Madam Speaker, I want to share a story of Bobby McKnight, a seventh-
generation cattleman from my district in Fort Davis, Texas.
Bobby says many farm and ranch farmers like his may be asset rich but
they are cash poor. Most of the value of their estate is attributed to
the value of the land they use to raise cattle and grow food for
consumers around the world. In fact, a lot of that food, my colleagues
are going to enjoy today.
Bobby shares that when times have been lean, he has had to make
sacrifices to keep his family business above water. But as any small-
businessowner can tell you, sometimes you run out of places to cut.
That is what happened to his family during hard times brought on by the
death tax. He had to let go of seasoned employees that had families of
their own, losing the skilled labor he needed to run their operation.
And now, as land values continue to increase, many farm and ranch
families are concerned that this may trigger the estate tax.
As Bobby and others can attest to, the death tax is devastating to
the family farms, ranches, and small businesses in my district and
throughout the Nation.
Come on, y'all. Let's stop punishing families for achieving the
American Dream. I support this bill to repeal the death tax and
encourage my colleagues to support it as well.
Mr. McDERMOTT. Madam Speaker, I yield myself the balance of my time.
For the past hour, my Republican colleagues have stood up and tried
to scare you. They have tried to turn the estate tax into a boogeyman
that kills family farms and hurts family business. They have called the
estate tax all kinds of bad names, like ``immoral,'' and they have
tried to claim it is a calculated attack on the American Dream. They
have also claimed that the estate tax disproportionately affects poor
small businesses and startups. These wild and inaccurate claims could
not be farther from the truth.
Here are the facts that Republicans have forgotten to mention:
[[Page H2284]]
The estate tax would only affect 5,400 estates out of an estimated
2.6 million this year. That means repealing the estate tax would amount
to a tax break for the top 0.2 percent--the Hiltons, the Adelsons, the
Kochs, those folks.
According to the Tax Policy Center, only 20--I emphasize 20--small
businesses and small farm estates nationwide owed an estate tax in
2013--20. Furthermore, those estates owed just 4 percent of their value
in tax.
Now, the real question here is this: America is a wonderful country.
We all have a chance to make it. Some make it better than others. That
is because luck and whatever hard work--and it isn't that everybody who
doesn't have money isn't working hard. We are all working hard, but
some have a little more luck than others. The fact is that, if you have
had a little luck, don't you owe a little something back to the
country?
Here you have got people who have gotten $10 million that we have
given them as an estate exemption, and then they owe 4 percent of the
value on money that has never been taxed before. It is all on capital
appreciation.
Now, my Republican friends conveniently forget to mention how much
this handout to the rich would cost--$280 billion. That is as though
every American today was giving a $1 billion tax cut to the wealthy in
this country. There are about 300-and-some-odd million of us. And if we
all gave, there we would be. And we are doing this to a group that has
no problems whatsoever. Their problem is how to keep their money. That
is their only problem.
So I want people to understand: this is a quarter of $1 trillion. And
as the gentleman from Oregon pointed out, we have a tremendous problem
in infrastructure in this country, but there is no money for that.
We have a tremendous problem in investment in the National Institutes
of Health. It used to be the National Institutes of Health funded 20
percent of the grant applications that were given to them. Today they
are only funding 6 percent of the grant applications that are given to
them.
We are not investing either in the physical infrastructure or the
human infrastructure of this country. What has made us strong, all of
us immigrants who came here--about 99.99 percent of them, as
immigrants, came here with nothing, and this country gave us an
opportunity to be rich or to be successful. The only way it will work
is if we pay something back into the process, not sitting there using
money that you never have been taxed on.
I urge my colleagues to vote ``no'' on this and to think about the
99.8 percent of Americans who will get no benefit whatsoever.
I yield back the balance of my time.
{time} 1030
Mr. BRADY of Texas. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, feel free to dismiss the woman in my district, a
widow, who now has been forced back to the bank for the third time to
take out a loan just to be able to keep the family farm they worked
generations--worked generations--to keep and hand down. Dismiss her as
the Paris Hiltons of the world, as the superrich.
Dismiss the 114 organizations who back the repeal. Most of them are
Main Street businesses who support this Death Tax Repeal Act. They are
storeowners; they are loggers--loggers in the field--and they are
plumbers. There is a glamorous life. That is the superrich.
That is who, after these people worked years and years and weekends
and nights to build up their business, these are the ones who, when
they pass away, Uncle Sam swoops in and confiscates--takes--nearly half
of what they have built a lifetime earning. Dismiss them if you will,
but this is the American Dream.
The American Dream is not a government that promises you welfare
checks and food stamps. The American Dream is the thought that you can
build yourself up and pull yourself up through hard work, skills, and
dedication and that you can build a better life for your family and
then give it to your children and grandchildren so maybe, just maybe,
they have a better chance at the American Dream, that they have
opportunities maybe you didn't have that they can pass on to their
children.
You will hear today, Oh, this only affects a few. Those are the
people who pay the tax. One out of three businesses, more than that,
are farmers. They are already paying money into tax planning. They are
putting money aside; they are spending hours that they would rather put
into their farm and their business. They would rather hire young people
and new people looking for jobs, but instead, they are trying to avoid
this horrible tax.
All for what? For a measly 2 days of Federal spending--actually less
than that--this government wastes so much money. It just pours it out
of here. Instead of tightening our belt, we attack the American Dream
of hard-working families and businesses.
Many of them, by the way, are women and minority-owned businesses
building wealth for the first time, believing the American Dream is
right for them. They are not Paris Hilton. They are not robber barons.
They are not the people who are dismissed on the floor today.
At the end of the day, this is the simple question: Whose money is
it? Whose hard work and years is it? Is it government's? Is it the
Washington politicians' who will take your money in time, force you to
sell your business or family-owned farm and waste it on who knows what?
Or is it your money, your hard work, and your American Dream? Are you
allowed to keep that dream and help your family going forward? Or is it
the government's dream, whatever that could be?
At the end of the day, what I love the most about America is we don't
resent success. We strive for it. Whatever success is for each of us,
we strive for it. We are absolutely convinced that we can achieve it
for us and that we can maybe give our kids a chance going forward.
This is a simple question. If you stand with those who believe it is
the government's money and hard work, vote ``no,'' but if you stand
with our family-owned farms, businesses, young people, and those
chasing the American dream, vote ``yes'' to end the death tax once and
for all.
Madam Speaker, I yield back the balance of my time.
Ms. JENKINS of Kansas. Madam Speaker, as a CPA, I understand that the
only certainties in life are death and taxes. Unfortunately, Washington
has decided that a third certainty can be created when we combine those
two separate terms.
The death tax is an issue that, as long as it exists, will be seen as
a provision by which politicians can pocket more of families' hard-
earned legacies.
I recently heard from one Kansan whose father-in-law, a farmer,
passed away in 2005. Because these folks wanted to keep the farm in the
family, they had to set up an installment plan with the IRS to pay the
death tax. Even then, they have been forced to dip into retirement
funds and sell other assets in order to make the payments and keep the
land.
Stories like this are the reason why I am a cosponsor of H.R. 1105,
which would permanently repeal the death tax. We need to stop treating
death as a taxable event. The only solution to this problem, which
faces family farmers and business owners in Kansas, is to eliminate the
death tax, once and for all.
Mr. BLUM. Madam Speaker, to paraphrase Benjamin Franklin, there are
only two sure things in life: death and taxes. Unfortunately for
Americans, the federal government has managed to combine the two into
greater tragedy with the federal estate tax, more commonly known as the
``death'' tax.
The death tax is a tax levied against property transferred at death
to a person's heirs. This property is neither new income or newly
acquired real estate or assets, but rather a simple transfer of
ownership. Confusingly to most commonsense folks, this the federal
government has already taxed this income. While there is an exemption
of up to $5.43M, the death tax remains a growing issue with farmers and
small businesses in the First District of Iowa as the values of
farmland real estate and industrial equipment continue to rise.
While supporters of the death tax say only a small percentage of
businesses and farms actually end up paying the tax, I believe this is
a question of fairness. I oppose any means that grants the federal
government the ability to tax you twice on your income.
This, along with the compliance costs for estate planning, is why I
advocate for abolishing the death tax altogether.
As a cosponsor of H.R. 1105, the Death Tax Repeal Act of 2015, I
commend my colleagues in the House of Representatives in joining me in
passing this legislation by a bipartisan vote of 240 to 179.
Americans, already taxed to death, should not also be taxed in death.
Let the heirs, no
[[Page H2285]]
matter the value of the estate, determine what is best for the family
fortunes, large or small. It would be far better for our children and
grandchildren to invest, spend, or utilize our estates rather than the
federal government any more.
I look forward to working with my colleagues in the Senate to
continue to advance this important legislation that will finally permit
farms and small businesses to pass from generation to generation
without the specter of the death tax looming.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 200, the previous question is ordered on
the bill, as amended.
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.
Motion to Recommit
Mr. NOLAN. Madam Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. NOLAN. I am in its current form.
The SPEAKER pro tempore. The Clerk will report the motion.
The Clerk read as follows:
Mr. Nolan moves to recommit the bill H.R. 1105 to the
Committee on Ways and Means with instructions to report the
same back to the House forthwith with the following
amendment:
Add at the end the following:
SEC. 4. BENEFITS DISALLOWED IN CASES OF GIFT AND ESTATE TAX
EVASION.
(a) In General.--In the case of any disqualified
individual--
(1) the Internal Revenue Code of 1986 shall be applied and
administered as if the amendments made by this Act had never
been enacted,
(2) no credit shall be allowed under section 2505 of such
Code (relating to unified credit against gift tax) with
respect to any gifts made after such conviction, and
(3) the applicable exclusion amount with respect to such
individual under section 2010 of such Code (relating to
unified credit against estate tax) shall be zero.
(b) Disqualified Individual.--For purposes of this section,
the term ``disqualified individual'' means any individual
who--
(1) is convicted of attempting to evade or defeat the tax
imposed under chapter 12 of such Code (relating to gift tax),
or
(2) prior to the date of the enactment of this Act, engaged
in a transaction (or series of transactions) with the intent
to evade or defeat the tax imposed under chapter 11 of such
Code (relating to estate tax).
Mr. BRADY of Texas (during the reading). Madam Speaker, I reserve a
point of order.
The SPEAKER pro tempore. A point of order is reserved.
The Clerk will read.
The Clerk continued to read.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Minnesota is recognized for 5 minutes in support of his motion.
Mr. NOLAN. Madam Speaker, this is the final amendment to the bill
which would not kill the bill or send it back to committee. If adopted,
the bill will immediately proceed to final passage, as amended.
Madam Speaker, years ago, when I first went into public life, my
father,--as fathers could be expected--gave me a little fatherly
advice.
He said: Son, I will always be proud of you if you just do a couple
of things.
I said: What is it, Dad?
He said: Number one, be honest. I don't want my kids getting in
trouble. Tell the truth.
Secondly, he said: If you're going to go in public life, commit
yourself to working for the common good. Don't worry too much about the
rich. They have got a way of taking care of themselves.
Well, my father never had any money to speak of, but, boy, he sure
understood that. If you look at this chart here, this is what this bill
is really all about. This bill is about giving $270 billion in tax
benefits to the richest of the rich. That's right.
This is America, and here is that less than 1 percent of the 1
percent, $270 billion tax break, 5,500 individuals over the next 10
years. That means the rest of the country is going to have to pay for
it.
Have these people benefited from the greatness of America where
people can work hard, prosper, and become successful? Yes, of course,
they have. They are the richest of the rich.
Here, we want to give them another tax break? Talk about greed. Talk
about carrying the water for the richest of the rich. What are we
talking about here? Do you know what, it gets even more egregious, and
that is what my amendment is about here today.
Under my amendment, this little percent, this little 1 percent of the
1 percent, if they have engaged and been found guilty of tax fraud as
it relates to inheritance and gift taxes, they are going to benefit
from this. They amass fortunes through illegal activities as it relates
just to this very specific tax; and we want to give them a tax break on
the fortunes that they amassed illegally?
The least we can do--and that is what my amendment does--my amendment
says that, if you have been found guilty of tax fraud trying to get
more than you already have illegally and criminally, then you are not
going to get the benefit of this tax exemption.
I am confident that if my good friends and good colleagues here on
the floor of the House on both the Republican and Democratic sides look
at this thing honestly, they will say: I have got to support that
amendment. I can't go back home and tell my folks how people who are
found criminally guilty of trying to cheat the taxpayers of this
country out of taxes that were due should be entitled to benefit from
that. We can't do that.
I want to remind everybody that here we are looking at this country
at a time when the disparity and inequality of income in this country
is the worst of any developed nation in the world.
People like Pope Francis are concerned about it. Leading economists
like Al Greenspan are talking about it. By God, when Hillary Clinton
and Ted Cruz announce their candidacies for the Presidency because they
are concerned about the growing disparity and inequality in income, we
have a problem in this country.
Mind you, this gift tax, we are here talking about farmers and
businessmen. Well, I am a businessman. I spent 32 years of my life in
business. Let's tell the truth. Let's tell the truth. Ninety-nine
percent of the people in this country are not required to pay any
estate or gift tax because the value of their farm, their business,
their accumulation in life does not exceed the limits that are
allowable under the law--which, by the way, are $5.5 million per
individual, $10 million, $11 million for a family.
That is a pretty nice gift at the end of the day for something that,
quite frankly, you were not the hard-working, creative, innovative
person who made all that money. You are just the beneficiary by wealth
the old-fashioned way: you inherited it.
Do we all aspire to wealth and success? Yeah. That is something we
want to applaud. It is something we want to celebrate. This is about
celebrating the gift of inheritance, and there is plenty of it here in
this legislation.
At the end of the day, this bill is really about the other 99 percent
because they are the ones who are going to have to make up the $270
billion in gifts that we gave already to the richest of the rich. That
is not how you fix this problem of growing disparity that is
threatening our economy and threatening our well-being.
Madam Speaker, I urge the adoption of my amendment, and I yield back
the balance of my time.
Mr. BRADY of Texas. Madam Speaker, I withdraw the reservation of the
point of order.
The SPEAKER pro tempore. The reservation of the point of order is
withdrawn.
Mr. BRADY of Texas. I rise in opposition to the motion.
The SPEAKER pro tempore. The gentleman from Texas is recognized for 5
minutes.
Mr. BRADY of Texas. Madam Speaker, all this is a red herring. The
desperation you hear is for a government in Washington that desperately
wants to keep spending your money on $800 toilets and on research
projects that make no sense and who feel free to waste your money at
will because they are not the ones who worked a lifetime to earn it.
Madam Speaker, today, we heard Congresswoman Kristi Noem talk about
the tragedy of her dad and how, 3 days after his death, they were
notified by Uncle Sam that they owed or they would have to sell their
ranch.
We heard from a gentleman from Texas whose dad built up from one car
and four stalls a family-owned car dealership with 400 workers. It was
a profitable company that nearly went
[[Page H2286]]
bankrupt because they had to pay Uncle Sam or sell the business. They
worked 20 years to pay off that loan.
My constituent, a woman who is widowed, was forced back to the bank
for the third time, paying death tax for her grandfather, her father,
and now her and her husband, just to keep the family farm they have
worked generations on. These are the people who are punished by this
tax.
It is not the government's money and work. It is yours. This is all
about that issue. At the end of the day, unless we want to keep
attacking the American Dream and insisting that Uncle Sam swoop in and
take your nest egg, it is time to restore the American Dream and to end
the death tax once and for all.
Madam Speaker, I urge my colleagues to defeat this motion to
recommit.
I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. NOLAN. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to the order of the House of today,
further proceedings on this question will be postponed.
____________________