[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[Senate]
[Pages 11292-11293]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               ESTATE TAX

  Mr. WHITEHOUSE. Mr. President, Senator Brown and I have come to the 
floor today to talk about the estate tax. Today's discussion was 
prompted by a recent New York Times report that an estate of a Texas 
natural gas tycoon--Mr. Duncan of Houston--is worth $9 billion. That is 
a nine with nine zeros after it. It is a big number, and it is going to 
go without tax to his heirs. Without any tax at all. It is hard to know 
what his tax planning is, but if the ordinary rates applied, the tax 
that would be paid by this estate might be as much as $4 billion.
  I think it is important to put that in counterpoint with the 
discussion we have been having on the floor today, where our friends on 
the other side of the aisle are blocking unemployment insurance for 
Americans who, through no fault of their own, lost their jobs. Because 
of what Wall Street did to wipe out the economy, they are out there on 
their own. They can't find work. In Rhode Island, we have 70,000 people 
unemployed in our small State. Our unemployment rate is 12.3 percent. 
And if you don't have unemployment insurance to protect you at a time 
such as that, you are stuck. Unemployment insurance goes to pay for 
food. It goes to pay for gas in the tank, to look for the next job. It 
goes to pay for shoes for your children. It goes to pay for clothing 
and rent and heat or electricity--all the basics. They are blocking it. 
They are blocking it because it is not paid for, as if this were not an 
emergency.
  But they are perfectly happy--in fact, we haven't heard a peep out of 
them--with the Duncan estate going tax free to his heirs. I don't know 
how many of them there are, but if there are any less than nine, they 
all just became billionaires, tax free. That is the kind of contrast 
that is so remarkable about this building. We have an entire party that 
is dedicated to preventing working people, who have lost their jobs 
through no fault of their own as a result of this economic meltdown, 
from getting unemployment insurance, and that has actually already 
expired and we are trying to backfill it for that period, but they are 
completely satisfied with an oil tycoon worth $9 billion having his 
estate go completely tax free to his heirs. That situation is happening 
because of a glitch in the Tax Code that we could not fix. It is part 
of the Bush tax cuts having run to their conclusion.
  The estate tax goes back to 1789 in its first incarnation. It has 
been permanent since 1916. John D. Rockefeller paid estate taxes in 
1937 when he died. He was taxed at a 70-percent rate. Today, we are 
having a debate about whether we should continue at a rate of only 45 
percent. The Duncan estate went through at zero percent.
  This cut, which took $4 billion out of the economy to pay this one 
family with a tax-free estate, was pushed through by the Republicans 
using reconciliation. If you have been listening on the floor, you have 
heard a lot of critique about what a terrible procedure reconciliation 
is when it is used to do anything to help regular Americans. But when 
it comes to cutting the estate tax so that the Duncan family can have a 
$9 billion estate pass tax free, well, that is a perfectly fine use of 
reconciliation, according to our Republican friends.
  At this point, at exemption levels of $3.5 million per individual, $7 
million per couple, only a few thousand estates each year pay any 
estate tax at all. It is a tax that only hits not the rich but the 
superrich--the billionaires, such as the Duncan family. And while we 
are in this period of economic turmoil, while we are in this period 
where one party is trying to keep regular workers from getting access 
to unemployment insurance in the middle of this economic disaster, they 
are all for an unpaid-for zeroing out of the estate tax so that a $9 
billion estate passes completely tax free.
  I think that is wrong. I think it shows priorities that are 
completely topsy-turvy--completely upside-down. I know that Senator 
Brown wanted to join me, and I have gone on for a bit, so I will quiet 
down for a second so he can be heard. But it is immensely frustrating 
that that is the priority around here--let the working family lose the 
basic paycheck that holds the family together but have the billionaires 
get $9 billion tax free.
  Mr. BROWN of Ohio. I thank Senator Whitehouse for his comments. As 
Senator Whitehouse said, I have been in this body only since January of 
2007. Most of the damage from the estate tax was done prior to our 
being here. But I spent some years before being elected to the Senate 
in the House of Representatives, and anytime we talked about the estate 
tax in the House, my Republican colleagues would use two terms. They 
would talk about the ``politics of envy'' and they would talk about 
``class warfare;'' that Democrats were envious of success and that we 
were engaging in class warfare, wanting to turn one social class 
against another.
  But the issue here isn't any strong desire for us to engage in 
retribution against anybody or any class envy. The situation is this, 
and let's start with this chart. This is a percentage of estates 
subject to tax. The estate tax, which the Republicans called the 
``death tax,'' does not impact 99.3 percent of people who die in this 
country. Their families pay zero estate tax. It is only, as Senator 
Whitehouse said, the absolute mega superrich. It is not people worth 
just a few million but only seven-tenths of 1 percent. That means it is 
7 out of 1,000 who will pay any estate tax at all. And so this issue--
not aimed at any one person--raises the question of: What do we do 
instead?
  The Duncan family--this is Mr. Duncan, whom Senator Whitehouse talked 
about--died with $9 billion, and his family pays no estate tax 
whatsoever. Senator Whitehouse pointed out that if there are fewer than 
nine members of that family, they all woke up the next morning 
certainly very sad about their father or their uncle or their brother, 
but they also woke up as billionaires the next day, and our condolences 
go out to that family, but something has to replace this. If the estate 
tax was where it should have been, he would have--his family would 
have--paid the Federal Government $3 billion or $4 billion.
  What does that mean? It means that during this previous Congress--the 
2002 and 2003 Congresses--when the Bush administration ran up this huge 
debt, with tax cuts for the rich, not paid for but passed on to our 
children and grandchildren; the Iraq war, not paid for and passed on to 
our children and grandchildren; the giveaway to the drug and insurance 
companies in the name of Medicare privatization, passed on to our 
children and grandchildren; and the billions of dollars of cost that 
was added to the bill, this would have helped pay for some of that.

[[Page 11293]]

  The $3 billion or $4 billion that would have been generated by the 
Duncan estate, where does that money come from? What do we replace that 
with? We either continue to tax middle-class people in this country too 
heavily or we cut programs for that $3 billion or $4 billion or we 
charge it to our grandchildren. And that is what has happened. As 
Senator Whitehouse said, it is a contrast.
  What do we do? We can do as Republicans do: We can deny unemployment 
compensation; deny COBRA insurance coverage, so people can keep their 
health insurance; deny Pell grants for people, which could be paid for 
by this $3 billion or $4 billion, or should we tax more people to pay 
for it? The Republicans didn't care about the budget deficit when it 
was the Iraq war. They didn't pay for the Iraq war. They didn't care 
about the budget deficit when it was the giveaway to the drug 
companies. Now all of a sudden they do.
  This is the face of people we deal with. This is a General Motors 
auto worker in Lorain, OH, somewhere near Dayton, where this GM plant 
closed in the last 2 years. These workers waiting here are losing their 
unemployment insurance because people on the other side of the aisle--
our Republican colleagues--simply would rather protect the super 
wealthiest people in our society--they would rather protect these 
seven-tenths or 7 out of every 1,000 people--and helping them pay no 
taxes, rather than taking care of this unemployed worker. That is the 
tragedy of the choices they have made.
  Those contrasts, as Senator Whitehouse said, are very clear, between 
Republicans wanting to protect the superrich and Democrats wanting to 
make sure that unemployment compensation is extended. These are human 
beings, each with a story. You can bet in this crowd some of these 
people not only lost their job but they lost their insurance, and some 
of them have lost their home as well. Because I know what has happened 
in the Dayton area, in Miami Valley. Far too many people have lost 
their homes.
  So while the Republicans are trying to protect the Duncan estate, 
with billions and billions of dollars in that estate, people such as 
Senator Whitehouse, Majority Leader Reid, who is on the floor, and 
Senator Kaufman want to see us take care of the unemployed workers, 
take care of those who have lost their insurance, take care of those 
who are faced with foreclosure because of the economic situation. As 
Senator Whitehouse said, these people didn't choose to be in this 
situation.
  As Warren Buffett said in 2007:

       The average American went exactly nowhere on the economic 
     scale in the last 20 years. They have been on a treadmill 
     while the super rich have been on a space ship.

  That is exactly what happened in this country. The wealthiest people 
have done better and better as their tax rate went down and down. Those 
middle-class kids who need Pell grants, the middle-class families who 
lost their jobs who are now on the unemployment line, those workers who 
have lost their insurance through no fault of their own--they lost 
their jobs--they are on this downward spiral which simply is not what 
our country stands for.
  Mr. WHITEHOUSE. Two points I would like to make. One is echoing what 
Senator Brown just said. We always hear about the debt and the pay-for 
from the other side when it is convenient, when they are trying to stop 
something the administration wants to do. When it helps regular people 
who have lost their jobs through no fault of their own, then it becomes 
an international incident if it is not paid for. But when an estate of 
$9 billion is allowed to pass tax free because of a loophole, that is 
OK. That is a $4 billion unpaid-for loss to the government, through its 
revenues. That is just fine.
  There is a disconnect there. If you are serious about the deficit, 
you have to be serious about it when it is billionaires and not just 
serious about it when it is regular working families. There is a one-
sidedness and a convenience for their concern about the deficit. When 
it is their President in the White House, Katey, bar the door. By my 
calculation they blew $9 trillion during the Bush administration. Now 
they suddenly have had an epiphany about debt, but it does not quite 
extend to billionaires who are allowed to pass their estates through 
tax free. So much for the debt and the pay-for concern.
  The other group they are very concerned about all the time is 
corporations. In this year, corporations have paid less tax compared to 
humans than ever before, since 1983, where there was a glitch and 
corporations paid less taxes relative to what humans pay than now. But 
other than that, 1 year, 1983, more than a quarter of a century ago, 
corporations are paying an all-time low in taxes compared to what 
humans pay.
  If you go back, it is 70 years--1983 was just a 1-year exemption. So 
all this battle has driven down tax rates for corporations, tax rates 
for billionaires, and here we are with a deficit and they do not care 
about the billionaires.
  I will close. I see the majority leader on the Senate floor, and I do 
not want to take time. I will close. America is a place of which we are 
very proud. It is the greatest country ever. It is a place where people 
can get fabulously rich. Not only is it a place where you can get 
fabulously rich, when you get fabulously rich you can still live a 
relatively normal life. You don't have to live like some Third World 
thug behind armed guards driving around in convoys with armed SUVs. You 
can live a normal life as a very rich person.
  Everybody has a chance to get rich. Everybody has a chance to become 
a millionaire, a multimillionaire, a billionaire. But when they do, 
they have to pay their share.
  The PRESIDING OFFICER (Mrs. Hagan). The time of the Senator has 
expired.
  Mr. WHITEHOUSE. I thank the Chair.

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