S 56 IS
106th CONGRESS
1st Session
S. 56
To repeal the Federal estate and gift taxes and the tax on
generation-skipping transfers.
IN THE SENATE OF THE UNITED STATES
JANUARY 19, 1999
Mr. KYL (for himself, Mr. ALLARD, Mr. ASHCROFT, Mr. BURNS, Mr. COCHRAN, Mr.
COVERDELL, Mr. CRAPO, Mr. ENZI, Mr. GRAMM, Mr. GRAMS, Mr. HAGEL, Mr. HELMS, Mrs.
HUTCHISON, Mr. INHOFE, Mr. MACK, Mr. MURKOWSKI, Mr. ROBERTS, Mr. SMITH of New
Hampshire, Mr. SESSIONS, and Mr. THOMAS) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To repeal the Federal estate and gift taxes and the tax on
generation-skipping transfers.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Family Heritage Preservation Act'.
SEC. 2. FINDINGS.
(1) Hard working American men and women spend a lifetime saving to
provide for their children and grandchildren, paying taxes all the while.
Throughout their lives, they pay taxes on the income and gains from their
labor and their investment. Because of the heavy burden of income taxes,
property taxes, and other levies, it is enormously difficult to accumulate
savings for a family's future. Worst of all, when the purpose of that hard
earned savings is about to be achieved, families discover that between 37
percent and 55 percent of their after-tax savings is confiscated by Federal
estate taxes.
(2) These transfer, estate, and gift taxes punish lifelong habits of
thrift; they discourage entrepreneurship; they penalize families; and they
have a negative effect on other tax revenue sources.
(3) These taxes raise almost no material revenue for the Federal
Government. In fiscal year 1998, they produced less than 1 percent of total
Federal revenues.
(4) The waste and economic inefficiency caused by estate taxes is well
known. American families employ legions of tax accountants and lawyers each
year to set up trust and other prolix devices designed to avoid these
onerous levies. The make-work imposed upon the economy comprises billions of
dollars.
(5) In order to pay these excessive taxes, many small businesses must
liquidate all or part of their assets. By causing business closures, these
taxes constrict business activity, increase unemployment, and reduce tax
revenue to the Federal Government.
(6) Independent analyses indicate that, were these onerous taxes
repealed, the Nation's Gross Domestic Product, Federal and State tax
revenues, employment base, and capital formation would increase
substantially. According to a December 1998 study by the Joint Economic
Committee, these taxes have reduced the stock of capital in the United
States by $497,000,000,000 reduced annual Federal income tax receipts by
$20,000,000,000 and caused family businesses to divert resources from
investment and to develop environmentally sensitive land.
(7) Repealing these taxes will ensure economic fairness for all American
families and businesses, as well as economic growth and prosperity for the
Nation as a whole.
SEC. 3. REPEAL OF FEDERAL TRANSFER TAXES.
(a) GENERAL RULE- Subtitle B of the Internal Revenue Code of 1986
(relating to estate, gift, and generation-skipping taxes) is hereby
repealed.
(b) EFFECTIVE DATE- The repeal make by subsection (a) shall apply to the
estates of decedents dying, and gifts and generation-skipping transfers made,
after the date of the enactment of this Act.
END