DEATH TAX SUNSET ACT -- HON. JOE SCARBOROUGH (Extensions of Remarks - March 25, 1999)

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HON. JOE SCARBOROUGH OF FLORIDA IN THE HOUSE OF REPRESENTATIVES THURSDAY, MARCH 25, 1999

Mr. SCARBOROUGH. Mr. Speaker, I'm pleased today to introduce the Death Tax Sunset Act which would put an end to the Federal government's most outrageous form of taxation. Very simply, my bill would put an end to estate and gift taxes after the year 2002. Hard working Americans deserve no less.

The thought that our government can take over half of a person's life savings when they die should sicken every American. How can we justify taking 55 percent of Americans' life savings when they die? The answer, quite simply, is that we cannot.
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First instituted in the late 18th century, the estate tax was enacted to help our young nation build a Navy to protect our shores. Until 1916 when it became a permanent part of the tax code, it was repealed and brought back several times during times of emergency. It has been largely unchanged since the 1930's. The death tax is now a combination of three taxes: the estate tax, the gift tax, and the generation-skipping transfer tax. Its tax rate is the steepest in the tax code--beginning at 37 percent and rising to an incredible 55 percent.

The National Federation of Independent Businesses has called the estate tax ``the single greatest government burden imposed upon small family businesses.'' The National Commission on Economic Growth noted in its report that it makes little sense and is unfair to impose extra taxes on those who choose to pass their assets on to their children and grandchildren rather than spend the money before they die. This cuts to the heart of the American dream of success from hard work and fiscal responsibility. Entrepreneurs should not be punished for their success--they should be rewarded.

Why should death taxes be repealed? Besides the fact that these taxes punish savings, thrift, and entrepreneurship, they have a devastating effect on family farmers and small businesses. According to a recent report by the Center for the Study of Taxation, 7 of our 10 businesses don't survive through a second generation and almost 9 in 10 fail to make it through a third. In fact, 9 out of 10 family business owners who took over after the principal's death in a recent survey said death taxes contributed to their business' demise.

If Congress succeeds in repealing these unfair, burdensome, and punitive taxes, the economic benefits will be enormous. In fact, the Heritage Foundation in 1997 forecast that during the ten year period after death tax repeal: an average of 145,000 new jobs would be created; our economy would yield an extra $1.1 billion per year; personal income would rise by an additional $8 billion per year; and the economic growth caused by repeal would more than offset any revenue lost to the treasury from the repeal. This is just one of a number of studies that detail the extraordinary benefits of repealing estate and gift taxes.

Mr. Speaker, I ask my colleagues to join with me in sunsetting the most egregious form of taxation. We should set a goal of the end of the year 2002 to completely repeal death taxes. We must make it a priority so that we move away from punishing hard work, thrift, savings, and entrepreneurship and start rewarding these most American of values.
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