[Congressional Record (Bound Edition), Volume 146 (2000), Part 10]
[Senate]
[Pages 14430-14431]
[From the U.S. Government Publishing Office, www.gpo.gov]



                       DEATH TAX ELIMINATION ACT

  Mr. LEVIN. Mr. President, I want to spend a few moments this 
afternoon to explain why I opposed the Republican proposal to repeal 
the Federal estate tax and why I supported the alternative Democratic 
proposal to provide relief in the estate tax for those who, in my 
judgment, need it the most, that is, small businesses, family farms, 
and those who are more modestly situated than those who would receive 
the most of the relief under the Republican proposal.
  The current estate tax was first enacted by Congress in 1916, partly 
at the behest of President Teddy Roosevelt. Teddy Roosevelt was right; 
it is appropriate for there to be an estate tax on those who prosper so 
greatly in the American economic system in order to provide some 
assistance to those who have worked hard but have fallen behind and in 
order also to do some things we must do in order to improve our society 
and our communities. That is the basic tenet of a progressive system of 
taxation.
  I think President Teddy Roosevelt was also correct that the tax 
should not be designed in such a way as to discourage people from 
seeing to it that their children are more secure but, rather, it should 
be aimed at immense fortunes which have been created.
  That is why I supported the Democratic proposal to reform the estate 
tax to provide prompt relief to small business owners and farmers 
rather than voting for the Republican proposal which would have 
repealed it more slowly over the next 10 years but then would have 
totally repealed it for even the greatest portion.
  The Democratic proposal targets tax relief to persons with estates, 
small businesses, and family farms of up to $8 million. By increasing 
the exemption for qualified family-owned business interests from its 
current level of $2.6 million per couple to $4 million per couple in 
2001 and $8 million per couple in 2009, the Democratic alternative 
provides significant immediate relief and then removes altogether the 
tax for the vast majority of the 2 percent of family farms and small 
businesses that are currently subject to the tax.
  In contrast, the Republican plan removes no one from the estate tax 
burden totally for another 10 years but then removes even the largest 
estate completely at huge costs to the Treasury.
  In addition to providing relief immediately, the Democratic proposal 
does so at a more reasonable cost--$64 billion over 10 years--compared 
to $105 billion for the Republican repeal. This $40 billion difference 
can and should go to other important national priorities, such as a 
prescription drug benefit for Medicare, making a college education more 
affordable, extending Medicare solvency, or reducing the national debt.
  The Republican repeal would cost much more than that because in the 
second 10 years--from 2011 to 2020, the same decade in which the baby 
boomers begin to retire and place strains on the Medicare system and on 
Social Security--the repeal is estimated to cost up to $750 billion.
  That is what these two charts show. There is a significant revenue 
loss from the Republican repeal, starting in 2010 at the rate of about 
$23 billion a year, going up to $53 billion a year in 2015, and then 
$66 billion a year in 2020, $82 billion in 2025, and so forth.
  That kind of severe strain on the Treasury begins in about the year 
2010--that is, at the same time when there is a great demand on the 
Treasury to make payments to Social Security. Until about 2015, Social 
Security is in surplus. But then in about 2015, Social Security takes 
in less than it is paying out, and the Treasury from the general fund 
must begin to pay back to Social Security a part of the debt which has 
been built up for Social Security. Those payments significantly 
increase, starting in the year 2015 from $12 billion a year, to $183 
billion in 2020, to $416 billion a year in 2025, and so forth.
  That is one of the major problems with the estate tax proposal the 
Republican majority offered--that the drain it is going to place on the 
Treasury, the loss to the Treasury, begins to hit severely at precisely 
the same time, or at least approximately the same time, as there is a 
significant shortfall for Social Security and when payments must be 
paid from the Treasury to Social Security if we are going to keep our 
promise to those who retire in those years.
  I believe taxes should be distributed fairly among all Americans. To 
give a huge tax cut to the wealthiest among us at the expense of 
important national priorities for the rest of us, at the risk of not 
being able to pay what is required to Social Security recipients, what 
is committed to be paid to them, and what was promised to be paid to

[[Page 14431]]

the recipients of Social Security starting in the years 2015 and 
beyond, is a serious mistake. It is simply wrong.
  I believe the Democratic estate tax reform plan is consistent with 
national priorities and is consistent with keeping our commitments to 
Social Security. The alternative Republican plan puts those commitments 
at risk and puts those priorities at risk. That is why I thought the 
Democratic plan was fairer to our taxpayers and fairer to this Nation.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.

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