[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[House]
[Pages 9861-9862]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    DISADVANTAGES OF ESTATE TAX BILL

  The SPEAKER pro tempore (Mr. Gary Miller of California). Under a 
previous order of the House, the gentleman from California (Mr. 
Sherman) is recognized for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, on Friday, we are going to take up a bill 
to abolish the estate tax, a bill that has about as much merit as the 
prediction of the gentleman from Indiana (Mr. Burton) that the Pacers 
will defeat the Lakers in the upcoming series.
  Let us first put this tax in context. Only 2 percent of American 
families pay a single penny of estate tax. This is because the tax is 
designed so that a husband and wife can leave their first $2 million, 
first $2 million to their heirs without paying a penny in tax. So this 
tax is for those who are asked, do you want to be a millionaire, and 
literally became millionaires, $2 million. Literally millionaire, that 
word meaning someone who inherits a million dollars.
  The tax, of course, does not fall upon the decedent but rather on 
their heirs. The tax falls exclusively on billionaires by definition. 
The tax is an obnoxious tax as all taxes are obnoxious. But if we are 
going to start to abolish taxes, we ought to start abolishing the ones 
that hit working families the hardest.
  This is a tax that falls exclusively, not on the fruits of the effort 
of the person paying the tax, but on the fruits of inheritance instead.
  Now, we are told that this tax represents double taxation. Let us put 
one thing in context. When someone makes an investment, buys some stock 
for $1,000, holds that stock until the stock is worth $1 million and 
leaves it to their children, there is no tax on that $999,000 profit.
  The reason is that there is an estate tax on those assets. Those who 
propose

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to abolish the estate tax while continuing the current provision that 
provides a step up in the basis of assets received from a decedent are 
not arguing to abolish double taxation, they are arguing to abolish 
single taxation. In fact, the amount of revenue that the Federal 
Government gives up through allowing that step up in basis is quite 
significant, even when compared to the total revenue generated by the 
estate tax.
  I would point out that, if we want to abolish double taxation, let us 
start by providing a credit for every working family equal to the sales 
tax that they have to pay, so that somebody who is trying to make it on 
6 bucks an hour or 9 bucks an hour goes out and buys goods in their 
State, goes out and buys food and clothing, that we care for that 
working American first and worry about that double taxation where 
somebody makes 6 bucks an hour, makes a certain amount, loses a chunk 
due to Federal taxation, and then sees a portion of that net pay going 
in State sales tax.
  We are told that many businesses are not continued in family 
ownership and that somehow that is terrible for the employees. But we 
are given only the statistic that the heirs of small businesses choose 
not to continue those businesses. We are not told why. Does the son or 
daughter of a farmer want to be a farmer? Sometimes yes, sometimes no. 
If they choose not to be in agriculture, is that traceable to the 
estate tax? Only by a few stories, a few analyses, no statistics.
  We are told that family businesses are sold and that is bad for the 
employees of those businesses. Are we given any statistics as to what 
happens when those family businesses are sold? No. Nor are we told 
whether those family businesses are sold because there is a Federal 
estate tax or for some other reason.
  In fact, we have special provisions in the estate tax law designed to 
minimize and delay the effect of the estate tax on those whose 
inheritance is made up chiefly of a farm or chiefly of a closely held 
business. Those tax provisions are availed of, I believe, roughly 6 
percent of the time. That means we are abolishing a tax that 94 percent 
of those paying the tax have nothing to do with small business, or at 
least nothing to do with those provisions.
  Mr. Speaker, I regret only that 5 minutes does not allow me to even 
scratch the surface of the disadvantages of this bill. I look forward 
to the debate on Friday.

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