[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[House]
[Pages 9958-9964]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 9958]]

                             NIGHTSIDE CHAT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Colorado (Mr. McInnis) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. McINNIS. Mr. Speaker, once again we are here for a nightside 
chat. It is very interesting. I just had the opportunity to hear the 
gentleman from California (Mr. Sherman) speak about the death tax. What 
I was surprised about is he actually got some applause as he concluded 
his remarks.
  I want to talk about his remarks on the death tax. This is a 
supporter of the death tax in this country. I want to specifically go 
through the impacts, the negative impacts that this tax called the 
death tax has on our country.
  I want to point out very clearly, Mr. Speaker, that the current 
administration, the Democrats, have not only proposed not to cut the 
estate tax but, in fact, in the administration budget, and I would urge 
my colleagues from the State of California to look in the 
administration's budget, and they will find out that there is not a 
freeze on the death tax; that, in fact, the administration proposes a 
$9.5 billion increase in the death tax. I say come on to my colleagues 
from the Democratic side who are supporting this death tax. Be 
straightforward. Be up front. Talk about that administration budget. 
Talk about the administration policy.
  They want to increase the death tax on the American people. They do 
not want to freeze it. They do not want to cut it. Let us talk about 
facts here this evening. Let us address it.
  Today, very interesting, I read the Wall Street Journal. I tell my 
colleagues, I am an avid reader of the Wall Street Journal. I think 
they have excellent articles. I also read articles written, and I have 
it here to my left taped on this platform, an article by Albert R. 
Hunt. I thought this evening would be a good opportunity for us to go 
over a few points made in his article, because I think his article is 
full of inaccuracies.
  I am afraid that the gentleman, Mr. Hunt, who wrote this article has 
not been to rural America. I am afraid that he simplifies, is even 
disingenuous in his comments towards those of us in rural America who 
are impacted by death taxes.
  Now, before we start our conversation, Mr. Speaker, let us just 
remind ourselves what are the death taxes. Death taxes are a tax 
imposed upon one's estate, actually upon one's death. One has about 9 
months to pay them. They are taxes, in many cases, on property that one 
already has paid taxes upon. In other words, during one's lifetime, for 
example, a rancher, a farmer, a small business, one begins to work the 
American dream, one begins to accumulate some assets.
  It does not take much anymore to get to $675,000 if one owns some 
land, for example, in Colorado or if one owns a small business and one 
has benefited from the growth in this economy.
  What the Government says is, despite the fact one has paid taxes all 
one's life on most of this property that one has now accumulated, with 
the exception of some IRAs, despite the fact that one has paid taxes 
one's entire life, we the Government, we Uncle Sam are going to come to 
one's estate and, upon one's death, we are going to tax one again, as 
if the Government has not gotten enough.
  Well, let me tell my colleagues it has been oversimplified by the 
previous speaker, the gentleman from California (Mr. Sherman). He makes 
it sound as if it is the very wealthiest people in this country and all 
we are doing is asking him to dig out some pocket change and throw it 
out on the table so that the Government can be satisfied and take its 
take and walk away. That is not what is happening out there.
  I am disappointed the gentleman from California (Mr. Sherman) has 
left the Chamber because I wish he were here so he could hear firsthand 
what that does to the small business people, what it does to the 
ranchers and the farmers, and what it does to the people in Colorado 
and throughout this Nation who are advocating open space instead of 
condominiums.
  It is time, Mr. Speaker, to wake up to what this death tax is doing: 
number one, what that impact is, and, number two, what is important is 
the principle. Where is the justification to go to somebody who has 
succeeded in the American dream, who understands American free 
enterprise, who has been successful with American free enterprise, who 
wants to pass something on to the next generation. Where is the 
principle of justification in going to that family's estate and saying 
to them, hey, we are Uncle Sam, and we have not had enough. We want to 
tax you just a little more. By the way, a little more could go clear up 
to 55 percent of your estate.
  I am going to give my colleagues a specific example here a little 
later on of how it impacted, not only the estate, but how it impacted 
the family of a successful individual who recognized the American dream 
who started out with nothing, and probably most important, and, again, 
I wish the gentleman from California (Mr. Sherman) were here on the 
floor, how it impacted the entire community.
  My colleagues want to talk about charitable giving to churches, well, 
stay tuned for my example of what happens when the Government comes in 
and taxes property that has already been taxed, in many cases not only 
once, twice, or three times.

                              {time}  2115

  Let me turn now for a moment to this article by Mr. Hunt. Let us kind 
of go through the article. Of course, in the first paragraph Mr. Hunt 
compares what the House Republicans are doing. I am glad that he has 
made it very clear that, in fact, it is the Republicans who have taken 
the lead on eliminating this tax, the death tax. Ironically, in the 
last couple of days, the Democratic leadership has jumped up and all of 
a sudden exhibited a great deal of interest in also trying to get rid 
of the estate tax at the same time apparently some of the troops have 
been directed to come out here and talk about how abusive it is. And, 
of course, Mr. Hunt plays right into their hands.
  Let us go over this article. Mr. Hunt. ``House Republicans, with the 
help of some accommodating Democrats,'' as if it is wrong for a 
Democrat to support doing away with the death tax, ``wants to give $50 
billion to Steve Forbes and Bill Gates.'' Of course, Mr. Hunt is going 
to talk about the Steve Forbes and the Bill Gates kind of people. How 
interesting in that paragraph he does not talk about the ranchers, he 
does not talk about the open space matters, he does not talk about the 
small businesses. Mr. Hunt does not talk about the American dream. All 
Mr. Hunt talks about is $50 billion.
  We are getting this money from a tax that, in my opinion, is not 
justified; a tax that is the most punitive tax we have in our system, 
punitive meaning punishing tax. It is there for one purpose, it is 
there as a shot based on a person's wealth. It is there penalizing 
someone who has become successful. That is the only reason that tax is 
in place. Yet Mr. Hunt's concern, as expressed in this article, is not 
whether or not it is justified in principle, Mr. Hunt's point is that 
we are losing $50 billion. So whether it is right or not, we cannot 
afford to lose the $50 billion.
  How interesting that Mr. Hunt in his article does not mention that 
the administration proposes this year to increase the death tax by $9.5 
billion. Is that fair? What we were hoping for, until George Bush takes 
office, which I hope occurs, and the reason I mention this is because 
George W. Bush has committed to eliminating the death tax, but until 
that happens, I was in hopes at least the Democratic leadership would 
stay neutral on this estate tax. It was too much to expect the 
Democratic administration would actually support us in a reduction of 
the estate tax, but they caught me off guard because I did not expect 
the Democratic administration to propose this year in the 
administration's budget a $9.5 billion increase on the death tax.

[[Page 9959]]

  Let us go a little further. I just mentioned that Bush advocates the 
repeal. Here they talk about diminished support for churches. If we do 
not tax the rich people, so-called, as they quote it, if we do not tax 
the rich people in this country the churches are going to suffer. Now, 
boy, is that an example. The churches are going to suffer. I am going 
to go through an example and show my colleagues how the estate tax made 
a church suffer; how an entire community in small town America 
suffered. Not Bill Gates' community, not Steve Forbes' community. And, 
by the way, he names two Republicans. Let us talk about some Democrats. 
Not the Kennedys, none of these big families' communities, but small 
town America. Let us talk about small town America tonight and what 
this estate tax does to small town America.
  It is interesting that the gentleman who spoke said that this bill is 
wrong because it does not give tax relief to working families. That is 
what the gentleman from California just told all of us, my colleagues, 
that this bill to reduce the estate tax does not give a tax break to 
working families. In other words, the gentleman's assumption, as he 
spoke, and I am not sure if it was his intent, but as the gentleman 
spoke his comments were that if an individual happened to accumulate 
more than $675,000 either in a small business or some lands or some 
other type of success, that individual apparently is not a working 
member of our society; that somehow that money just fell out of the sky 
and that the government is entitled to come to that individual's 
family, to that person's survivors, and tax them. Where is the equity 
of that?
  Let us go a little further in this article. Mr. Hunt says, with 
regard to this estate tax, ``these arguments are Trojan horses. The 
pressure for repeal comes from wealthy campaign contributors rather 
than the average voters.'' Mr. Hunt needs to come with myself or some 
of my colleagues out to rural America. He needs to step out there and 
let us show him these wealthy contributors, these families, these small 
ranchers, these farmers.
  All of my colleagues know that the very wealthy, the Bill Gateses and 
the Steve Forbeses have an entire floor of attorneys to advise them on 
how to escape that estate tax. They can afford it. They have the 
expertise to minimize the tax. The people that do not have that kind of 
money are people like my in-laws. They are ranchers. They have been on 
the same ranch since 1860, somewhere in that time period. A hundred-
some years they have been on that ranch, I would say to Mr. Hunt and to 
my colleagues.
  We should not underestimate the American dream and what it meant to 
my wife's descendants, what it meant to those people in her family who 
came over to this country for the American dream. Yet the gentleman 
from California says they must not be working members of our society 
because they have accumulated wealth to the extent that the government 
can tax it. Wealth, for example in my in-laws' family, is not cash, it 
is the land they live on. It is the land they have ranched on for over 
100-some years. It is the land they live for. It is the house where my 
father-in-law was born and where his father was born. It is the 
community where my wife was born.
  Maybe some of these people who think this estate tax, one, is fair 
and, two, is only for the wealthy should spend a weekend with me in 
Colorado. I will show my colleagues some of these people that are being 
impacted.
  Let us talk a little further about this article. He says it is 
disingenuous, for example, to talk about farms and small businesses. 
After all, he says, they are fewer than 5 percent of all taxable 
estates. I do not give a darn if a small family farm or a small family 
ranch is only 1 percent of the taxable estates. We have a fiduciary 
duty as representatives of the citizens of this country to be fair. And 
how can we be fair if we go to even 1 percent of the small ranches and 
farms in this country and say to them that even though they have worked 
their land, even though they have tried to save it so that their farm 
or their ranch can be passed on to the next generation, that because 
they only represent 1 percent, we are going to nail them to the wall. 
We are going to come and tax them on land that they have already been 
taxed on.
  My gosh, I wish my colleagues could see what my in-laws went through 
to save their pennies, to sell their cows so that they could buy the 
land and have a ranch to pass on to the next generation. And now, of 
all the things that their descendants could ever have imagined back in 
the 1860s or the 1800s, when my in-laws' grandfathers and grandmothers 
came to this country, of all the things that would destroy their dream, 
I am sure they never thought it would be the government; that upon 
their death they would have a new tax called the death tax.
  And let me tell my colleagues, the purpose, the real reason the death 
tax was put in place was jealousy. It was put in as a punitive measure 
against some of the tycoons of the early 1900s, the Carnegies, the 
Rockefellers, and people like that. Our forefathers never envisioned, 
when they drafted our constitution, they never envisioned when they 
settled this country that the government would, upon a person's death, 
punish that person's family by taking the valuable assets that had been 
accumulated, whether or not they amounted to a whole bunch.
  Let us go a little further in this article and talk about what it 
does here. It talks about, well, the Democrats, the top Democrat tax 
writer, for example, will offer an alternative that will lower rates, 
and somehow this is the magical thing. Let me say, before we talk about 
lowering rates, let us address the issue of whether or not this tax is 
justified. If we have a tax in place and we come to the conclusion that 
the tax is not fair, we should not care about whether or not it is 
producing revenue, we should care about is it fair to the people that 
we represent.
  This country is a country based on the principle of fairness, based 
on justice, and is it just and is it fair to impose a tax on the 
American people even if it is only 1 percent of the American people; a 
tax that serves as a punishment and not as a legitimate taxing purpose? 
That is exactly what we have with the death tax.
  Now, I referred earlier in my comments about giving an example of the 
American dream and how the American dream was crushed. It is not about 
a Bill Gates, it is not about a Kennedy, it is not about a Steve 
Forbes, it is not about any wealthy family in America. It is about 
small town America. It is about a small town in the State of Colorado. 
It is about a small town that has churches and schools. It is a small 
town that has a lot of community unity in it. Let me tell my colleagues 
what happened in that small town.
  A young man, many, many years ago, came to this small town in 
Colorado with big dreams. He started working in a construction company 
with a shovel in his hand. The gentleman's name was Joe. Joe went out 
and he dug ditches. He worked 10 hours a day, 12 hours a day, 14 hours 
a day, because all he wanted was to gain a little foothold on the 
American dream. He wanted to go out and have the opportunity, if he 
worked harder, if he thought smarter, to be successful for himself and 
for his family. That, after all, is how he was brought up. Those were 
the principles of America: Go out and enjoy capitalism, go out and 
enjoy the American free enterprise.
  So that is what Joe did. He started in this small community digging 
ditches. Pretty soon he got promoted to be the bookkeeper of this 
construction company, and later on, several years later, he had an 
opportunity, on an installment basis, making payments out of his check 
every month, at the same time trying to support his young family, to 
buy into the business. Now, colleagues, he did not inherit any money. 
He did not come into this with a bag full of money. He came into it 
with a bag full of energy, with a bag full of dedication, with the 
American dream that maybe he could own a part of this construction 
company.
  Now, Joe's family, his wife and his two boys, although his boys were 
very, very young at the time, they shared in the sacrifice. They did 
not get the extra privileges of life, because papa was out there taking 
every penny he

[[Page 9960]]

could to make his payment to have a little shot at ownership of the 
construction company.
  Well, that ownership began to pay off after years. And during those 
years that the amount of money coming back from the construction 
company began to exceed the money invested in the construction company, 
in other words, the profits from his investment, he paid his taxes. 
Never once in his life did Joe evade taxes. Never once in his life did 
the government have to come to Joe and tell him that he had not paid 
his taxes; that he had tried to cheat the American people; that he was 
not carrying his fair share because he was trying to get out of his 
taxes. It never happened once with Joe.

                              {time}  2130

  Joe is one of the most patriotic men I ever met. And so as he began 
to make profits, the first thing he did was pay his taxes. And then do 
you know what he did? He took money, and he put it back into the 
business. The more money he put back into the business, the more people 
in this small community he gave jobs to.
  Then some of the money he took home he put in the local bank. And the 
money that he put in the local bank grew the bank, and pretty soon the 
bank was able to make more loans to people with the American dream in 
this small town of Colorado. This money was circulating in the 
community. It was not transferred to the Government in Washington, DC, 
except for the legitimate taxes.
  What else did he do? And I hope my colleague from the State of 
California is listening to this. He supported the local church. In 
fact, at the time of his death, he supported the local church to the 
extent of about 70 percent.
  Mr. Speaker, let me recap where we are.
  Joe goes to the small community in Colorado. He does not have any 
money. He did not inherit. He is not wealthy, he and his wife both. At 
that point in time, the role was she was to assume the role of being a 
homemaker. She worked as hard as he did. She took care of the kids, who 
are two young boys. He worked 10 to 14 hours every day of the week, 
started in a ditch with a shovel, to try and make good to try and 
accomplish the American dream.
  And as often happens in America, if you work hard, you are rewarded. 
That is what happened to this gentleman. Joe began to become rewarded. 
The first person that got their hands on the money that he made was the 
Government. And it was fair. Joe, as long as I knew him, never 
complained about the taxes. He felt that he needed to give a fair share 
to the Government for the roads and for the military and for our 
national issues. So he paid his taxes.
  As I mentioned before, he was never late on taxes. He never avoided 
taxes. He was never cited by the Government for cheating on the taxes. 
He paid his taxes. And then he took the other money that he made and he 
put it back in the small company. This was the construction company 
which employed a few people.
  Pretty soon it employed a few more people, and pretty soon those 
people were able to take money home to their family. And pretty soon 
those people were able to save for their dream and their life because 
Joe was able to employ them. It created jobs in our community.
  The gentleman from California that spoke here earlier, the Democrat, 
believes that the way to create jobs is to create them in Washington, 
DC.
  I am telling you, this death tax, that is exactly what it does. It 
transfers wealth from a small community like ours or from any 
community. And where does that money go? When the Government charges a 
death tax, do you think that money stays in the community? Of course it 
does not.
  That money is immediately, within 9 months, has to be transferred to 
your State for their estate death tax or, more importantly, to 
Washington, DC; and then Washington, DC, redistributes it in this 
community for jobs in Washington, DC. It does not help our little 
communities out there in Colorado. And it did not help Joe.
  But Joe kept working, and he accumulated more and more ownership of 
the construction company until one day he was able to buy his own 
construction company after years and years of making payments. And so 
Joe ran that construction company, and he provided the majority of 
support for the local church of which he was a member. He supported the 
majority from a contribution point of view. He gave the largest 
contributions to almost every charity drive in that community. When 
somebody in that community got sick, when somebody in that community 
had a hardship, they went to Joe for help and Joe helped them.
  Now, I say Joe. I should also add, in fairness, Joe and his wife. 
Because, with all due credit, his wife worked just as hard as Joe did. 
So I should include both of those parties. So Joe and his wife, you 
could always go to them and they would always help out in their local 
community.
  So what happens? Joe and his wife were able to educate their 
children. Then Joe's wife takes ill. She does not come to a hospital in 
Washington, DC. By the way, his kids were not educated in Washington, 
DC. They were able to be sent to a State school. But Joe's wife becomes 
sick. She becomes ill. She dies of cancer.
  So Joe decides that he is going to sell the company. So Joe sells the 
company. And he immediately pays a capital gains tax, pays a capital 
gains tax on the sale of the company. Joe never complained about that. 
He made capital gains on that company.
  In other words, capital gains is you buy the company at this price, 
and you sell it at that price. That profit is called a capital gain. 
That is a legitimate gain upon which to charge tax. And that is exactly 
what they did. He did not complain about it. He paid a tax in excess of 
28 percent on the profit he made from the construction company he was 
able to own after starting in the ditch with a shovel.
  But then let me tell you what happened. Within 3 months Joe got 
cancer and he died. Do you know what the Federal Government did to that 
family estate? They went into that family estate, and they assessed it 
with a tax of 55 percent. Now, you add the 55 percent; and you add 24 
percent on capital gains because the construction company was the 
primary asset in the family estate, and you come up with a tax of 79 
percent.
  What this man and his wife spent their entire life working for, 79 
percent of it was taxed by the Government upon his death. That is 
within that period of time, 4 months preceding his death and upon his 
death.
  Now, I know the son very well, both the sons. I asked the one son, I 
said, now, tell me, 79 percent, that means your family got 21 cents on 
the dollar? In other words, 21 percent of what your father and mother 
spent their entire life working for, you got 21 cents on the dollar. 
No, no, no, he says. We did not get 21 cents on the dollar. Because we 
were forced to sell. We had to sell it within a very short period of 
time. We could not get the best price. We had to get whatever somebody 
would pay us so that we could pay the Government before the Government 
then assessed penalties upon us because we did not pay the death tax in 
time. So we really did not realize 21 percent.
  This family told me they thought they realized about 15 cents on the 
dollar. So their father and their mother worked their entire lives to 
accomplish an American dream. They paid taxes their entire lives. They 
never cheated the Government on one penny of tax; and upon their death, 
the Government came in and took over 79 percent of the value of that 
estate.
  And Mr. Hunt calls that, why do the Republicans complain about that? 
My colleague from California stands up and says, my gosh, it is going 
to cost us $50 billion; who cares about the fairness. It is going to 
cost the Government $50 billion to be fair to these people.
  Well, now what happens? The next thing that happens is that the local 
church comes to my friend, the son, the son of the father and mother I 
just talked about that died, and they said, you know, we are sorry 
about your father and your mother's passing. But

[[Page 9961]]

did you know that your father provided the majority of support for our 
local church? The son says, no, I did not. And did you know that our 
drive for a new building and these other charities, your father and 
mother were the primary people who donated in our small town; they are 
the ones that made it happen? The son says, no, I did not.
  Well, they said, the church, we hope that you are going to be able to 
continue on the commitment that your father and mother made, that you 
are going to be able to carry on like they did and make these major 
contributions, major in a small community. We are not talking about a 
$10 million grant to the Kennedy Center. We are talking about a small 
church in small town America. And we hope you are going to be able to 
continue this.
  Do you know what the son said? I cannot. I do not have the money. We 
had to send that money to the Federal Government in Washington, D.C.
  Now, this gentleman from California, my colleague, stands here and 
talks about fairness, talks about the fact that if we eliminate the 
estate tax that we are going to hurt churches. Wake up, my colleague.
  You want to see what hurts churches and what hurts charitable causes? 
Go out and see what you are doing with this punitive tax. And quit 
bringing up the name Bill Gates and the name Forbes and all of these 
wealthy families. Start talking about some of the people that do not 
have a lot of cash in their pocket, but instead their pockets are full 
of the American dream and they have had a little success so you 
penalize them.
  I see my colleague, the gentleman from Missouri (Mr. Hulshof), is 
here; and I am happy to yield to the gentleman if he would like to join 
in the discussion.
  Mr. HULSHOF. Mr. Speaker, I appreciate the gentleman yielding very 
much and especially on this very timely topic, as we have this 
discussion tomorrow on get getting rid of the Federal death tax, this 
very punitive tax.
  I know the gentleman has been talking about a recent editorial, in 
fact I think in today's Wall Street Journal. I am mindful of an 
editorial that was written in yesterday's Washington Post in a similar 
vein that indicates that what we are about to do tomorrow is 
``Government by Bumper Sticker,'' as the editorial says.
  I suspect that we are going to have during the course of this debate 
that mantra from those who oppose this idea that this is tax breaks for 
the wealthy.
  And yet, speaking of bumper stickers, the gentleman has been talking 
about friends near and dear to him back home in Colorado, but over the 
Memorial Day recess I had the opportunity to travel the highways of 
Missouri's 9th Congressional District, and I got behind this minivan 
vehicle that was pulling a camper trailer behind it; and the bumper 
sticker on the camper trailer said ``I'm spending my kids' 
inheritance.''
  And, of course, this is kind of a whimsical thought. And first I had 
to make sure that was not my family that was traveling down the highway 
spending their kids' inheritance. I think it points up really a more 
serious issue; and that is, it really in some cases, and my colleague 
pointed out some very real-life examples, in some cases it is cheaper 
to sell off the family business pre-death rather than to experience 
first of all the personal tragedy of the loss of a loved one but then 
having to deal with the Internal Revenue Service at the moment of 
death.
  The best bumper sticker slogan that I can think of regarding this 
issue is as follows: ``The death of a family member should not be a 
taxable event.''
  The point is, and I know that the editorials talk about and my 
colleague has spoken very eloquently and very passionately about the 
opponents of this repeal say, well, this is only going to help, as you 
my colleague mentioned, the Bill Gateses or the wealthy class but the 
wealthiest Americans.
  I think what gets lost in all of the debate is how many resources, 
how much money is spent, how much time and effort is spent in a way to 
avoid the death tax. There is not a lot of discussion about the amount 
of, again, resources committed to estate plans.
  Now, I have got many friends that are tax lawyers or accountants. But 
speaking of a real-life example, back home in Columbia, Missouri, which 
is my home, a family, the Eiffert family, Howard Eiffert started a 
lumber business, along with his wife Lucy; and they worked very hard 
during the course of their lifetimes; and their two sons, Brad and 
Greg, who now are the principals in that lumber business. And it has 
been successful.
  People around the mid-Missouri area recognize this lumber company. 
Howard is now enjoying retirement, and he is becoming more seasoned as 
a mature American. And yet the amount of money that the Eiffert family, 
particularly the two principals are spending, $35,000 a year on 
insurance premiums. And the sole purpose of purchasing that insurance 
policy is to have something in place so that when the inevitable 
mortality occurs that they will have proceeds from which they can then 
pay the Federal death tax.

                              {time}  2145

  That is $35,000 a year of capital that they could be investing in 
their business, investing in their families, putting aside money for a 
college education, whatever, letting them have that decision. But 
instead they are making the choice to put 35 grand a year in an 
insurance policy because they know that, as they have done their estate 
planning, that they are going to be socked with the Federal death tax.
  Mr. McINNIS. The gentleman's point is so well taken. In Colorado one 
of the families I am very familiar with, it is a ranching family, they 
barely get by from year to year but they have the land they have 
accumulated. In fact I will give an example of my in-laws. The family 
has been on there since the late 1860s. Somebody like our colleague 
from California, the Democrat who supports this or the administration 
that has actually asked for an increase, their response to my in-laws 
and to other family farmers and ranchers is, go out and buy life 
insurance. The example you just gave is that family puts out $35,000 
per year. My in-laws do not have $35,000 a year to pay for life 
insurance. They are lucky enough to get a new pickup every 5 or 6 
years.
  I wish some of these people who think this only applies to the Gates 
family or some of the other wealthy, and mind you, I do not take a 
thing away from the American dream, these people who have met with 
success. I wish they could come out and see the kind of expenditures 
that people like my in-laws have. They are very happy, they have lots 
of love, they love the land they are on, but they are not driving new 
pickups, flying in Gulfstreams, taking vacations in the Bahamas or 
anywhere else. Every penny they have got has to go back into the cattle 
operation. They do not have extra change for life insurance. I think 
the point the gentleman brings up is very valid.
  Mr. HULSHOF. I think what needs to be mentioned, Mr. Speaker, is that 
under present law, certain estates are shielded from the Federal death 
tax and that exemption or that unified credit, to talk the terminology, 
presently is under $700,000. If you consider a family farm anywhere 
across the country but certainly in Missouri, let us say if you have a 
400-acre farm and let us say for the purposes of this hypothetical, 
$1500 per acre, some places in Missouri that would be low, some places 
in Missouri perhaps high but I think on average if you say $1500 per 
acre average, for a 400-acre farm, right there you are talking about a 
$600,000 value just on land, not mentioning equipment that is needed to 
produce, not talking about the residence or the home.
  My friend from Colorado mentioned his constituent, having grown up 
and being born and grown up in the residence and worrying about being 
able to hang on to that asset. Life insurance proceeds, all of this 
becoming part of the estate that now is subject to the tax. Once that 
estate value is $1 more than the exemption, you are looking at about a 
37 percent tax rate up to, as the gentleman says, over half, 55 percent 
and in some instances as high as 60 percent.

[[Page 9962]]

  The point I would like to make is this, and I hope tomorrow as we 
have this debate, I really would encourage or challenge anybody who 
opposes this to give me a good policy reason why we have an inheritance 
tax. Really what is the reason? Two weeks ago in this House we repealed 
the Spanish American War tax that was imposed 102 years ago in 1898, 
that, quote, temporary tax to fund the Spanish American War which now 
we finally repealed, the inheritance tax as we know it today, 1916 and 
really what is the policy reason? What is the justification? I can 
really only think of two. One is to punish the successful, which I do 
not think even our liberal friends would necessarily agree with that. 
The only other instance I can think of as far as justification for 
keeping the inheritance tax is redistribution of wealth. I think 
certainly under our present tax code and the progressive nature, there 
are many far better ways and certainly when we are talking about to, 
quote, raise revenue for the government, rather than this very unfair 
tax which I think punishes family farms, family businesses of whatever 
size, whether they are facing the tax or whether they are expending 
resources to avoid the tax along the course of one's lifetime, I think 
that tomorrow afternoon we will be gratified with a vote. I would hope 
and I know our friends down on the other end of Pennsylvania Avenue 
have issued some sort of a veto threat under the present bill, I would 
like to see as we get that vote tallied tomorrow, a two-thirds vote in 
this House. It is a bipartisan bill with 45 Democratic cosponsors, many 
Republicans, and so I urge my colleagues, Mr. Speaker, to vote in favor 
of this repeal, to do what is right, because again the death of a 
family member should not be a taxable event.
  Mr. McINNIS. I would acknowledge to my friend the 45 Democrats that 
have signed onto this, they have enough guts to stand up to the 
administration and stand up and say wait a minute to their colleagues 
on the Democratic side, let us talk about, is this tax justified. Sure 
the revenue might be important but the primary focus of our question 
here this evening and the primary focus of our debate tomorrow should 
be, is this tax upon one's death a fair and justified tax? You can only 
answer that honestly by saying no.
  As the gentleman just very accurately pointed out, there are three 
reasons that this tax came about. One was an animosity and a jealousy 
towards the Rockefellers and the Carnegies and those kinds of families. 
It was a transfer of wealth. Even Al Hunt in his article today in the 
Wall Street Journal says the tax has always been aimed at the 
accumulation of wealth by sons and daughters of the elite. So because 
your parent as in my case in small town Colorado, because their parents 
realized the American dream, because they had a company that employed 
people in that community, they should be penalized.
  The second reason that these aristocrats and I call these the 
aristocrats, they may not have been aristocrats in wealth but they were 
aristocrats in class warfare. That is the second reason. Hey, let's go 
after the rich. The rich are always the wrong people. If you are rich 
somehow in this country, they never figure out and the same with the 
administration, they never figure out maybe you worked for it, maybe 
the American dream allowed you to have it. And what does ``rich'' mean? 
In a lot of our towns in Colorado, owning 50 acres is something. If I 
had 50 acres, I would feel rich. The government looks at it as an 
opportunity to tax you. I think it is very important that as we look 
into tomorrow's debate that we look at real life examples that somehow 
my colleagues on the Democratic side of the aisle who are opposing any 
kind of reduction or oppose elimination of the death tax, that they 
first go out into their community and do not go out to the Kennedys or 
the Gates or the wealthy people, go out to the average person in your 
community who has had some success, who has a home or some property 
valued over that $675,000 and ask them what happens to their money upon 
their death. What I urge my Democrat colleagues and what I ask the 
administration to take a look at on their policy is remember that what 
you are doing, you are removing money from a community and you are 
transferring it to Washington, D.C.
  Let me tell you what we have experienced in the State of Colorado. 
Fortunately a lot of you visit Colorado, and I am happy you do. 
Unfortunately a lot of people decided to stay there, it is so 
beautiful. And so our land values have gone up in Colorado. What we are 
seeing in Colorado is a lot of our beautiful open space, our mountains 
are being converted to subdivisions. Those mountains and those fields 
and those farms, they are farms and ranches. The reason that that land 
is available is not because these families want to give up farming, not 
because these families want to give up ranching, not because they want 
to give up the rural way of life but because in many cases the Federal 
Government through its death tax forces the family to sell that land. 
If you want to help protect open space, let these farms and ranches 
continue in existence and do not let the Al Hunts of this world tell 
you, well, they ought to just go out and plan for it, or the Gates 
family we are talking about or the Forbes family we are talking about, 
or the Carnegies or the Rockefellers. Do not let them sell you on that. 
They are sugar-coating it. Do not let them sugar-coat what you are 
doing by this death tax. It is not right, it is not fair, and you ought 
to admit it is not right and it is not fair. And you ought to get a 
firsthand experience from your own constituents as to what it does to 
your community. And the example I gave you this evening, what it did to 
the local church. The ranch example, what I gave you this evening and 
what it does to open space in States like Colorado, what it does to 
little businesses like Brookhart Lumber Company in Delta, Colorado. 
Headline in our local newspaper about 4 months ago, Brookhart must sell 
because of estate taxes. Brookhart, by the way, is not Home Depot. 
Brookhart maybe had 20 or 30 employees. Those people's jobs were at 
risk. I do not know whether they had to sell it or liquidate it. In a 
lot of cases they have to liquidate it. Remember that the only time 
that money does not work in a community, the only time you do not see 
the wealth, somebody's wealth circulate in a community is if a wealthy 
person goes out and digs a hole and buries their money in the ground. 
That does not happen very often. People who accumulate through success 
money in a community put it in the bank, they hire more people, they 
make investments, they buy land, that money circulates and circulates 
and circulates. And all the death tax does is it goes in and forces 
that money, one, to be converted to a cash form which requires in a lot 
of cases forced sales; two, it requires double or triple taxation; and, 
three, and probably as critical as anything else, it sucks that money 
out of the small community or out of any community and transfers the 
money to the Federal Government in Washington, D.C. for redistribution. 
By the way, a lot of that money is redistributed in the confines of 
Washington, D.C. So this community benefited upon the death of my 
constituents out in rural Colorado. Where is the fairness of that? 
Where is the fairness of a family in rural Missouri having their family 
accumulation under the American dream sucked to Washington, D.C.? That 
saying, the giant sucking sound of NAFTA many years ago, that is 
exactly what the estate tax does.
  I am asking all of my colleagues tomorrow when we do this debate, do 
not let them divert you into the vast wealth of a few rich American 
families. Again, I do not take it away from those families. Those 
people realized the American dream. Who cares how rich the person is 
that invented the seat belt? Who cares how rich the person is going to 
be that invents the cure to cancer or the cure to AIDS? Who cares? I do 
not. That is the incentive that drives it. But do not be diverted by a 
few select names they use tomorrow, of the status of like a Rockefeller 
or a Carnegie. Instead, bring those people that are using that in the 
debate, my colleagues and your colleagues, bring

[[Page 9963]]

them back to the American farm family, bring them back to the Colorado 
rancher, bring them back to the small lumber company in Missouri, bring 
them back to the small businesses in your communities. And then also 
ask them the fundamental question of the death tax and every American 
ought to be asked this question. Is it fair? Is it justified? How, 
Government, can you say you should go upon the tragedy, upon the death 
of a person and tax property upon which they have already taxed? I have 
no objection if somebody has some property that has not been taxed. 
Everybody agrees they should pay their fair share. But do not let them 
draw you off course with that, either. Talk about the property they 
have already paid the taxes on, and ask them, what does the American 
dream really mean? Does the American dream mean that you are not 
entitled to pass something on to your children? I can tell you in my 
own personal example, my wife and I are not wealthy but I can tell you 
one of our dreams in being in America is to save enough of our pennies 
so that maybe our kids when they grow up can have their own house, 
maybe our kids if they get in a hard spot and they need a new car, they 
can buy a new car. I am not talking about buying them a jet, I am not 
talking about buying them a palace in Aspen, Colorado. I am talking 
about buying them a basic house. That would give my wife and I a great 
deal of happiness if we could do something for our kids, but the 
government is doing everything they can through this death tax to take 
that American dream away from a lot of people. For a lot of our young 
constituents out there, our young men and women in their early 20's who 
are just starting on their career paths, who have in their mind a dream 
to do what my wife and I dream of doing, and that is provide something 
for the next generation, keep in mind that the group or society out 
there that will do everything they can within their powers to prevent 
you from going onto that next generation is your own government through 
this unfair and unjust tax called the death tax.
  Mr. Speaker, in the final minutes that I have, I would like to move 
to another subject. Today I had an opportunity this morning to visit 
with a famous singer, a gentlewoman named Carole King, very talented, 
very capable, and frankly a very impressive person. It was interesting 
to be a part of that discussion. The discussion was on wilderness areas 
and preservation of the wilds in the United States. Fundamentally we 
did not disagree on that issue. In fact, I am not sure anybody in this 
country disagrees on the fundamental issues of trying to preserve and 
utilize, kind of like Teddy Roosevelt. We have a right to use the land 
but we have no right to abuse the land. I have never met people that 
really consciously want to abuse the land and if we have those kinds of 
people, we ought to do something to eliminate their opportunities to 
abuse our land. But one of the things that I learned from our 
conversation this morning is that even people of note sometimes have 
not had the opportunity to understand the differences between the 
western United States and the eastern United States.

                              {time}  2200

  So in these next 9 minutes or so, I would like to show my colleagues 
a fundamental difference in the eastern United States compared to the 
western United States. Let us start with the first fundamental 
difference.
  Remember that in the west it does not rain like it does in the east. 
In the east, in a lot of cases, their problem is getting rid of the 
water. In the west, our problem is being able to save the water, to 
store the water, to obtain the water. For example, my State, the State 
of Colorado, is the only State in the union where all of our water runs 
out of the State. We have no water, free-flowing water for our use that 
comes into Colorado. So our water issues out here in the State of 
Colorado are different than water issues here in the State of New York 
or in the State of Maine or other places. Keep that in mind. If one 
lives in the east there is a fundamental difference on water alone as 
compared to the west. So it is very easy for people in the east, it is 
a free vote for them, to oppose us in the west where we have to store 
water.
  The second point is demonstrated by this map that I have brought here 
tonight. This map is titled, Government Lands. Take a look at the 
government landownership in the east. It is very sparse. In fact, one 
could take this pen and one could identify on this map with pencil 
points the government landownership in the east, with a couple of 
exceptions. We have a blotch in the Appalachias, we have the 
Everglades, we have some up in the northeast.
  But then take a look at the government ownership in the west. This is 
the western United States. It is almost entirely owned by the 
government. So people in the east have no idea, for the most part, what 
kind of impact we have when we are surrounded by government lands, when 
we live on government lands. So it is very easy for people in the east 
to talk about life in the west, but it is very hard for them to 
understand, and I say this with due respect to my colleagues from the 
east. They have never had to live under those conditions.
  Now, the history to that is really pretty simple. What happened in 
the early days when this young, growing country wanted to increase in 
size, we had to figure out a way to encourage people to leave the 
comforts of the East Coast and to go west to settle this country, 
because then, our purchases like the Louisiana Purchase, we needed to 
possess the land. A deed did not mean much. One actually needed to be 
in possession of the land. We know the old saying, possession is nine-
tenths of the law, that is where it came from. So to get people to 
settle out here, they said, look, we will give you free land, it is 
called the Homestead Act or the Home Stake Act, and it worked good. 
Here is 160 acres, 320 acres. Well, it worked good until it got to the 
Colorado Rockies or the Wyoming mountains or Montana or Idaho and they 
found out that while in Kansas or Pennsylvania or eastern Colorado, or 
Ohio, 160 acres could support one's family, here in these mountains, 
160 acres would not even feed a cow.
  So the government consciously decided, they said, well, we cannot 
give them an equivalent amount of acres; for example, 3,000 acres would 
be the equivalent of 160 acres. Let us go ahead and let the government 
keep the title for this. Politically, that is the wise thing to do 
because we cannot give that much land away to one person, so let us for 
formality just keep the title, but we will let the people use it. It is 
the government who put the people out there. It is the government who, 
for generation after generation has asked these people to occupy and 
make their living on this land. So understand that.
  This morning, in my conversation with Carol King, I thought it was 
very beneficial, and I look forward to future discussions, and I hope 
my colleagues do too, with individuals of this type of capability to 
explain the fundamental differences that exist. Because before we can 
come to some kind of understanding between the east and the west, 
before we can come to that understanding, we need to have an idea of 
each other's lifestyle. The people in the east need to understand our 
water problems in the west. The people in the east need to understand. 
For example, when they want to build something, they go to their city 
council or their county commissioner or their province. In the west, we 
have to do all that, plus in many, many cases we have to go all the way 
to the Federal Government clear in Washington to get permission to do 
something out here.
  So I am urging my colleagues from the east, do not just walk away 
with a free vote on people in the west. Sit down with us. Talk to us 
about what is different in the west than in the east. We all are 
Americans. This is the United States of America. We are a team. But we 
cannot be a team unless every team member understands what the other 
team member faces, understands the burdens that the other team members 
have. That is what makes the strongest team.
  This morning, in my conversation with Carol King, she indicated to me

[[Page 9964]]

that she was willing to sit down and try and listen to us and try and 
understand what we face there. Although she is from Idaho, I am not 
sure she was aware of this map. My guess is she had never seen this, 
but I saw willingness there. I would express to my colleagues from the 
east, take time to understand our water problems in the west. Take time 
to understand why we need water storage in the west. Take time to 
understand that most of the government ownership in this country is in 
the west. Take time to include us on the team.
  Yes, sure, in the east, you have the population, but understand, we 
are Americans too, and we have a part to play, and let us play it.
  Mr. Speaker, in conclusion, number one, I ask that we have more of a 
team effort from our colleagues in the east. Help us out. We are a good 
team, we make a great team.
  Second of all, in the debate tomorrow on this death tax, do not let 
them mislead us. This is not about the wealthiest families in America, 
this is about a lot of average, middle-income families in America. This 
is about a lot of family farms and a lot of family ranches and a lot of 
family businesses. This is about local churches and local charitable 
causes. This is about keeping money that was made under the American 
dream in the local community. This is about not allowing that money to 
be transferred from the local community to Washington, D.C. for 
redistribution.
  Mr. Chairman, I hope all of my colleagues pay attention in that 
debate tomorrow. It is important, and fundamentally it is the question 
we must ask, and my final comment of the evening is, is the death tax 
fair? Is it justified to go to a family that has realized the American 
dream and say to them, we do not want you to be able to transfer that 
wealth to your next generation, we want to transfer that money to the 
bureaucracy in Washington, D.C., so we are going to tax you on your 
death. If you think it is fair, vote with the administration to 
increase the estate tax $9.5 billion, which they are doing. But if you 
do not think it is fair, do not play party line, Democrats. Forty-five 
of you had enough guts to join us. Join us and let us get two-thirds up 
on that voting panel tomorrow, so we can override the administration's 
intent to raise the death tax, so that we can be fair to the many 
people in America who have gone after, sought, and succeeded in the 
American dream.

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