For Immediate Release
June, 2000

Washington, D.C. - Today, the U.S. House of Representatives considered HR 8, a bill that would repeal the estate and gift taxes. Under current law 2% of the people who die each year, those with very large amounts of wealth, pay the bulk of these taxes.

"The federal estate tax has had a great deal of attention because of its economic effect on family farms and small businesses. Unfortunately this bill doesn’t target these groups. Rather, it would enable the very richest in our country to pass vast fortunes to their heirs without a penny of tax, while working families are taxed on every dollar they earn," said Rep. Ron Kind (D-WI).

Rep. Rangel proposed an alternative measure that would selectively target the tax reduction for farm and small business estates. The Rangel substitute would immediately raise the special exclusion from the estate tax from $675,000 to $4 million for a couple owning a farm or small business and would lower the estate tax rates by 20% across the board.

In contrast to the Rangel bill, HR 8 repeals the federal estate and gift tax over a 10 year period, and eliminates $500 billion in tax revenue. The reduction in tax revenue would coincide with the time when baby boomers will be retiring and Social Security shifts from cash surplus to deficit. The Congressional Budget Office concluded that HR 8 will ultimately generate pressure for reductions in Social Security, Medicare and Medicaid benefits and limit the funds available to meet high priority needs such as improving educational opportunities, expanding health insurance coverage and reducing child poverty.

"I believe that we must provide relief to family farms and small businesses, but do so in a way that does not endanger Social Security, Medicare and Medicaid. That is why I support the bill offered by Rep. Rangel. This substitute legislation is a fiscally responsible alternative to HR 8, and lifts the tax burden where it is needed most," said Kind.

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