[Congressional Record (Bound Edition), Volume 149 (2003), Part 11]
[House]
[Pages 15077-15078]
[From the U.S. Government Publishing Office, www.gpo.gov]




                CONSERVATIVE MYTHS ABOUT THE ESTATE TAX

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey (Mr. Pascrell) is recognized for 5 minutes.
  Mr. PASCRELL. Mr. Speaker, I heard two gentlemen this evening, one 
from Minnesota, the other from Texas, say some things and I need to 
respond even though it is also part of what I am going to be saying 
this evening.
  One gentleman said the folks on this side of the aisle are concerned 
about class warfare. Now if we were in session, I would ask his words 
to be taken down because that has happened one too many times. That is 
serious business. That is political warfare here. We are all Americans, 
and we have a right to our opinions.
  The other gentleman, the gentleman from Minnesota, talked about 
unfairness, that we on this side are unfair. Let me tell Members what 
is unfair. That is the subject about which I speak tonight.
  The recent CBO study found that between 1979 and 1997, the after-tax 
incomes of the top 1 percent of the families rose 157 percent. The 
wealthiest 5 percent went up 81 percent compared with only a 10 percent 
gain of the people in the middle of the income distribution.
  Mr. Speaker, during that period of time, incomes in the bottom fifth 
of the population actually fell. That is what is unfair. I want to 
examine tonight the five myths, I call them lies, that the Republicans 
have put forth on the estate tax.
  The first myth: Many Americans will benefit from the repeal of the 
estate tax. It is in all of their literature. Well, let me see what the 
case is. Because the estate tax only falls on estates worth over a 
million, it only affects the richest of the 1.4 percent of American 
families. Two-thirds of the estate tax revenues comes from the 
wealthiest 0.2 percent. When the higher exemptions are fully 
implemented so a two-parent family could transfer $7 million to their 
children without any estate tax, only 0.05 percent would be subject to 
the estate tax.
  So in myth number 1, a study by the Center on Budget and Policy 
Priorities found that after all repeal of the estate tax, and that is 
where the other side is headed, the largest 4,500 estates, therefore 
the wealthiest 0.003 percent of all the taxpayers will receive as much 
relief from the repeal as 142 million Americans.
  Myth number 2: The estate tax is forcing family farmers to lose their 
farms. We could not find one farmer who was losing their farm, and then 
they try to quote from the American Farm Bureau Federation, and they 
could not find one farmer who lost their farm either. And as far as I 
am concerned, the American Farm Bureau Federation is just like the 
National Association of Manufacturers, they talk, do no good, and we 
continue to export jobs overseas. They are both worthless. Tell a lie 
enough times, and folks might believe it. The small farmers are not 
represented by the American Farm Bureau Federation.
  Myth number 3: The estate tax stifles creativity and innovation by 
punishing the successful. Listen to what Andrew Carnegie said about 
that myth, that each generation should ``have to start anew with equal 
opportunities. Their struggles to achieve would, generation after 
generation, bring the best and the brightest to the top.''
  Warren Buffett was quoted from this floor just a week ago, there is 
no free lunch.
  Myth number 4: Taking 55 percent of someone's life earnings is 
unfair. That

[[Page 15078]]

is a myth. Conservatives, particularly on the other side, do not let 
facts get in the way of political ideology. The effective tax rate, 
which is the percentage of an estate, which is actually taxed, does not 
even come close to 55 percent, Mr. Speaker, and they know it.
  In 1999, the effective tax rate on all estates was only 24 percent, 
less than half of the 55 percent reported. The 24 percent effective 
rate leaves heirs 76 percent of the value of the estates.
  Mr. Speaker, do not let Americans think you are going to help them on 
this estate tax when we are talking about a tiny percent of the 
population. The other side of the aisle is trying to create that myth.
  Finally, Mr. Speaker, the estate tax is double taxation. Do you want 
a list of those poor people in the middle class that we double tax on 
issues? There are a lot of ways that we tax besides the income tax. 
This is a myth and they have quoted from folks that do not even support 
the position. This vote that we will take on Thursday is one that 
everybody should look at the facts, not how things are perceived, not 
at how things look; look at who is being helped and look at the 
redistribution of wealth in this country, and we will see who is guilty 
of class warfare.
  Without the estate tax, these assets would never be taxed. But that 
is exactly the point. Conservatives who argue that it is unfair to tax 
them twice are really trying to get out of having them taxed at all. 
Repeal of the estate tax means that huge amounts of capital gains would 
be passed on to children without ever having been taxed.
  The fact that the estate tax also falls on a part of an estate made 
up of previously taxed income is not problematic because it is no 
different than how any other income is treated. Under our tax system, 
the same dollar is taxed multiple times as it moves through the economy 
from employer to employee to a gas station and then on to the next 
employee, ad infinitum. It is unfair and inconsistent to single out the 
estate tax for exemption from this system.

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