1999 Press Releases

Date: January 7, 1999

DEATH TAX REPEAL MOMENTUM BUILDS WITH COX BILL

“Dying Should Not Be a Taxable Event”

    Washington, D.C. -- The 60 Plus Association, a senior-citizens advocacy group, today hailed Representative Chris Cox (R-CA) for  re-introducing his “Family Heritage Preservation Act” which would repeal the federal estate tax, or as it is better known, “the Death Tax.”  60 Plus President Jim Martin said, “60 Plus has been with Rep. Cox every step of the way in his 6 year effort to repeal the Death Tax and we’ve  never been more excited by the prospects of imminent passage.

    “When Chris Cox started the effort to repeal the most confiscatory of all taxes, the Death Tax, he had only 29 sponsors.  Now he has approximately 200 bipartisan co-sponsors from across the political spectrum supporting repeal of the Death Tax.  The reason is simple, Death Tax repeal is not a political, or even a wealth issue, but an issue of fairness.  A recent poll commissioned for 60 Plus by the polling company revealed that even though less than 2% of the public is affected, 77% of the general public felt that the Death Tax was ‘unfair’ and should be repealed.  A few years ago, 60 Plus delivered over 400,000 petitions to Capitol Hill from people, none of whom are wealthy that I know of, calling for repeal of the Death Tax.  People feel this way because the Death Tax  is a ‘virtue’ tax since it discourages savings, forces families to develop environmentally sensitive land, and hurts family farms and small business.   Recent studies by both conservative and liberal scholars show that the Death Tax does not raise revenue because compliance costs associated with it are approximately equal to the amount of money raised by it.  Dying should not be a taxable event, so let’s kill the Death Tax by repealing it for a fourth and final time.”

    60 Plus presented Rep. Cox with its Benjamin Franklin Award in recognition of his efforts to repeal the Death Tax.  It was Franklin who said:  “In this world nothing can said to be certain, except death and taxes.”  The Death Tax adds a third certainty, taxes after death.  The Benjamin Franklin Award honors those fighting to eliminate the death tax.

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Date: January 8, 1999

Hastert: A True Champion of Seniors’ Tax Rights
DEATH TAX REPEAL CLOSER THAN EVER

 Washington, D.C. -- The 60 Plus Association created its “Guardian of Seniors Rights Award” to recognize members of Congress who are ‘senior friendly.’  “The new Speaker of the House, Rep. Denny Hastert (R-IL), is a proven fighter for seniors for he has received a perfect 100 score on three successive 60 Plus Scorecards and has won our Guardian Award all three times it has been presented,” said 60 Plus President Jim Martin.

 A prime example of Rep. Hastert’s fighting for senior citizens was his push to include repealing the Social Security earnings limit -- the deduction of benefits among Seniors who earn over a certain amount a year -- in the Contract with America.  60 Plus delivered over 400,000 petitions to Rep. Hastert and other Congressional leaders on this topic in 1994.  Rep. Hastert was successful in getting the exemption raised to $30,000 over seven years, with the goal of eliminating the limit entirely.  But more importantly, Rep. Hastert is a co-sponsor of Rep. Chris Cox’s (R-CA) bill to repeal the federal estate tax, the so-called “Death Tax.”  Hastert told the Washington Post (12/21/98) that he plans to make  “easing the tax burdens on the backs of seniors citizens” a top GOP priority.

 Martin saluted Hastert’s choice as Speaker, stating:  “Senior’s want their tax burdens lowered and, Rep. Hastert has always made that a priority.  In particular, seniors want the most confiscatory and destructive of all taxes, the Death Tax, repealed.  Rep. Hastert was one of 207 bi-partisan sponsors of Death Tax repeal in the last Congress, and under his leadership, repeal of this most anti-senior tax will be possible.  The time to kill the death tax has arrived!”

 60 Plus Honorary Chairman, former Congressman Roger Zion (R-IN) added: “I’ve known Denny Hastert for years, and seniors now have a great friend to fight for their issues, such as repealing the death tax.”

 60 Plus believes that dying should not be a taxable event and has made repeal of the death tax its top priority during its six-year history.

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DOES CLINTON WANT TO ‘SAVE’ SOCIAL SECURITY BY LETTING THE GOVERNMENT DESTROY IT?!?

 Washington D.C. -- The 60 Plus Association, the first seniors organization to publicly advocate the privatization/personalization of Social Security to save the system for future generations, is greatly dismayed by President Clinton’s proposal of having the government invest the people’s Social Security funds.

 60 Plus President Jim Martin called on the President to: “Stop sucker punching seniors and stop the shell game that has been played with Social Security year after year.  The time has come for real solutions.  Can you imagine what the same government that brought us the $75 toilet seat and trillion dollar deficits would do if it invested in the Stock Market?  Last year President Clinton promised to make Social Security his top priority, yet he did nothing.  This year he proposes government investing.  Can you imagine the non-economic agenda of some big government bureaucrats whose loyalty is to the politicians who appointed them?  These politicians would risk the people’s retirements on their own personal politically motivated investment choices.  At best, it would be another example of government waste and pork.  At worst, it would make the Social Security Trust Fund truly a ‘bust fund.’

“If the President and his Administration want to ‘save Social Security first’ he should heed the advice of his own party’s leading spokesmen on social security reform: Senators Daniel Patrick Moynihan (D-NY) and Bob Kerrey (D-NE), as well as Rep. Charlie Stenholm (D-TX).  These Democrats -- along with Republican Senators Judd Gregg (R-NH), Rick Santorum (R-PA), and Phil Gramm (R-TX) and also Republican Representatives Jim Kolbe (R-AZ), Mark Sanford (R-SC) Nick Smith (R-MI), and John Porter (R-IL) and leading scholars -- all agree that by personalizing social security and giving individuals, not the government, more control over their futures, you will help future generations to have a secure retirement income.

“60 Plus is cautiously optimistic that the third rail of politics -- ‘touch it and you die’ -- has finally been unplugged.  60 Plus agrees with the President Clinton that some of the people’s Social Security Funds should be privately invested but by the people, not by politically appointed and motivated big government bureaucrats.  60 Plus hopes that President Clinton will join members of both parties and debate Social Security reform this time, not demagogue it, as has been done so often in the past.”

Date: January 21, 1999

SAVING SOCIAL SECURITY FOR
FUTURE GENERATIONS
Remarks by 60 Plus Association President Jim Martin

 Washington D.C. -- Good morning.  To give a little historical perspective to the topic of today’s press conference, I would like to point out that when I came to Washington way back in 1962 as a newspaper reporter John F. Kennedy was in the White House, Neil Armstrong had not yet walked on the moon, Strom Thurmond was still a Democrat, and the looming problems with Social Security had been perceived by few other than Barry Goldwater.

 Since I’ve seen the issue ‘demagogued’ -- big time -- for over half the life of the 60 year-old program, I’d like to say at the outset nobody is going to take away Social Security.  It’s more likely that a meteorite will fall on the Social Security Administration building in Baltimore before that happens.

 As the president of the 60 Plus Association, the first seniors organization to publicly advocate the privatization or personalization of Social Security to save the system for future generations, 60 Plus strongly endorses Star Parker’s call -- through the Coalition on Urban Renewal & Education (CURE) -- for the privatization of Social Security.

 I’m often asked why a senior citizens group would get involved with efforts to personalize Social Security since everyone knows it is safe for today’s seniors.  The answer is simple and comes from my favorite senior, my mother.  She tells me that seniors most valuable assets are not just their Social Security checks, their retirement income or their pensions -- although these are certainly near the top of the list -- but rather that seniors most valuable assets are their children and grandchildren and we must save Social Security for them.

Seniors want to fix Social Security so future generations not only receive the same level of benefits -- something that is currently in doubt with the Social Security Trust Fund due to start going bankrupt in 2013 -- but to have the opportunity to have an even  better retirement.  This is especially true for minorities who fare terribly under the current system.  That’s why 60 Plus feels that privatization, or as I prefer to call it using the words of Senator Bob Kerrey (D-NE) ‘personalization’, is a solution that not only saves Social Security for future generations but also improves it.”

Leaders across the political spectrum from Sen. Daniel Patrick Moynihan (D-NY) to Sen. Kerrey to Rep. Charlie Stenholm (D-TX) to Rep. Jim Kolbe (R-AZ) to Rep. Mark Sanford (R-SC) to Sen. Rick Santorum (R-PA) to Sen. Judd Gregg (R-NH) have all endorsed some form of personalization of Social Security as a means to save it for future generations.

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Date: February 25, 1999

“DEATH TAX” REPEAL MOMENTUM BUILDING
The Most Popular Woman in America Hates the Death Tax

Washington D.C. --  60 Plus President Jim Martin stated: “The 60 Plus Association’s half million seniors, none wealthy that I know of, exuberantly endorse H.R. 8, The Death Tax Elimination Act, a bi-partisan bill to phase out the federal estate tax, or more poignantly called the “Death” Tax.  60 Plus thanks chief sponsors -- Reps. Jennifer Dunn (R-WA) and John Tanner (D-TN), as well as the initial 89 co-sponsors -- for the Dunn-Tanner bill to reduce the confiscatory 55% tax by 5% annually until it is totally eliminated.”

“But in addition to these Congressional and grassroots supporters, 60 Plus would like to mention one particular person who has spoken out about the Death Tax, Oprah Winfrey.  Oprah Winfrey, often called the most popular woman in America, stated:”

“I think it's so irritating that once I die, 55 percent of my money goes to the United States government.”

“You know why that's so irritating? Because you already have paid nearly 50 percent.”

“When you leave like a house or you leave money to people, then they're taxed 55 percent, so you've got to leave them enough so that once they're taxed, they still have some money.”

“That's why you always hear about people where their aunts left them houses or left them stuff and they can't keep the house because the taxes are so much.”
     --Oprah Winfrey, 8/4/97, Oprah, Harpo Productions

This quote and other information about repealing the Death Tax may be found on The 60 Plus Association’s web page, “www.60plus.org.”  60 Plus is a non-partisan non-profit nationwide seniors group that has made “killing the Death Tax” its top priority.

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Date: March 24, 1999

Death Should Not Be a Taxable Event
CLINTON WANTS TO RAISE TAXES ON THE DEAD
Even Clinton’s Former Economic Advisers Disagree
60 Plus/ATR Press Conference, 9:45 a.m., HC-6, U.S. Capitol

Washington D.C. -- The 60 Plus Association, in conjunction with America’s for Tax Reform(ATR), held a press conference today to oppose the Clinton/Gore Administration’s proposal to increase the federal estate tax, or as it is better known, the “Death Tax.”  Other members of the “Kill the Death Coalition” joined in calling for repeal of the Death Tax.

60 Plus President Jim Martin stated at the press conference:  “It is ironic that President Clinton proposes several Death Tax increases when even his own former economic advisers have publicly stated that the Death Tax doesn’t work, i.e. it’s not a revenue raiser but actually a disincentive to job creation and thus a revenue loser.”

The former Chairman of the President’s Council of Economic Advisers, Joseph Stiglitz, wrote in the Journal of Political Economy:  the “desirability of the estate [Death] tax may still be questioned, not only because of the distortions it introduces but also because it may increase inequality in the distribution of consumption.”

President Clinton’s argument for increasing the Death Taxes seems to be that the Death Tax is a tax on the rich.  Martin replies:  “The rich don’t pay it, they have lawyers, accountants and insurance agents to help them devise plans to protect their after tax assets.  That’s why Oprah Winfrey called the Death Tax ‘irritating’ to say the least, and you can’t blame her for protecting her after tax assets.”

Another former member of the President’s Council of Economic Adviser and former assistant Treasury Secretary, Alicia Munnell, agreed with Martin when she wrote in New England Economic Review:  “The rich and super rich interested in expanding the effort have numerous avenues of avoidance. . . . Tax liabilities depend on the skill of the estate planner, rather than the capacity to pay.”

Martin concluded:  “It is small family farmers and the mom-and-pop businesses that pay the Death Tax.  It’s people like environmentally award winning Mississippi tree farmer Chester Thigpen, the 87-year-old grandson of slaves, who are effected.  Thigpen is ‘land rich and cash poor’ and, at his death, his children and grandchildren may have to sell the family farm to pay the first claimant in line  - - Uncle Sam -- not even a blood relative.  It is for the Chester Thigpens that we need to Kill the Death Tax.  Dying should not be a taxable event!”

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 WASHINGTON -- We join Americans for Tax Reform(ATR) on this day of outrage over an ever more complicated tax code, a code that’s grown from one page in 1913 into thousand of pages.  As head of a seniors group, we’re often asked to reminisce back to the ‘good ol’ days,’ when tax laws were surely far simpler.

 Let me remind you that across the street there in the White House way back in 1937, President Franklin Delano Roosevelt, in a quiet moment of exasperation, penned a note to his Bureau of Internal Revenue directing that somebody prepare his return and tell him what he owed.  Enough for the good ol’ days!

 Clearly it’s time for an overhaul.

 Thus the 60 Plus Association, a six year old non-partisan organization representing a half million seniors, strongly endorses bi-partisan legislation requiring a two-thirds super-majority to raise taxes to be voted on today in the House.  The bill’s chief sponsors are Reps. Joe Barton (R-TX), Ralph Hall (D-TX), John Shadegg (R-AZ), and Virgil Goode (D-VA).  Jon Kyl (R-AZ) is the principal author in the Senate.

 President Clinton’s 1993 tax increase – the largest in history -- and which specifically penalized low and middle income senior citizens with a 70% tax hike on their Social Security benefits, would never have passed if the super majority law had been in place.

 Two years later, Mr. Clinton confessed that he had raised taxes “too much.”  ‘Stop me before I do it again,’ he seemed to be crying out.  So let’s do the President, and seniors living on a fixed income, a favor and pass this bill scheduled for a vote today.

 It took a two-thirds vote of Congress in 1913 to pass the 16th Amendment to the Constitution to legalize income taxes, it is only right that it should require a two-thirds vote today to raise taxes.  The Tax Limitation Amendment (TLA) is the vehicle to bring some sanity and discipline to our government.

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Date: May 19, 1999

HOUSE VOTES TO PROTECT THE SOCIAL SECURITY SURPLUS BY “LOCKING IT AWAY”

 Washington, D.C.--The House vote to lock away 100 percent of the Social Security Surplus (416-12) was hailed by a national senior citizens group as “a monumental milestone” for future retirees.

 60 Plus Association President Jim Martin said his group plans to key vote this proposal on the Association’s Scorecard for the 106th Congress.”

 Martin noted that the proposal supported by a majority vote of the U.S. House of Representatives takes the retirement funds “off the table” by “locking them away” from big spenders, he stated at a press conference.

 “I’ve been in this town since 1962, more than 3 ½ decades, and I never thought I’d live to see the day that Congress would ‘do the right thing’ and leave these funds where they belong, for Social Security and Medicare, if needed.

 “The President talks about ‘setting aside 62% for Social Security and 15% for Medicare.’  That’s only a 77% solution, and while that’s not a bad start, we urge him to join this House majority and look seniors, Baby Boomers, and younger workers in the eye and tell them that he agrees to order hands off 100% of the surplus generated by payroll taxes.  This would tell seniors and future retirees that Congress and the President are in agreement on a plan to save Social Security and Medicare in the near term, allowing time for Members of Congress, from both parties, to work out a solution for the long term.

 “Thank you to each and every Member who voted to save the surplus.  This historic vote helps assure seniors that Social Security and Medicare will be there for future retirees,”  Martin concluded.

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Date: June 24,1999

SENIORS SAY:
DEATH TAX: ‘DYING SHOULD NOT BE A TAXABLE EVENT’
SOCIAL SECURITY LOCK BOX: ‘MONUMENTAL MILESTONE’
Statement by 60 Plus President Jim Martin at Capitol Hill Press Conference

   Washington, D.C.— The 60 Plus Association’s agenda—which I believe represents the sentiment of millions of senior citizens—is two-fold.

            1) Kill the Death Tax for us old folks and,
            2) Save Social Security for the young folks.

   I’m here today on behalf of the 60 Plus Association to endorse the American Values Tax Savings Act of 1999.  60 Plus congratulates the sponsors of this legislation, in particular Reps. David McIntosh (R-IN) and Sam Johnson (R-TX), as well as the other distinguished members of Congress who are present.

   Today’s bill enacts over $700 billion in tax cuts while not touching a penny of the Social Security surplus.  Seniors, their children and grandchildren, owe you a debt of gratitude.  On their behalf, thank you.

   Elimination of the death tax remains as the 60 Plus Association’s main objective—a half million seniors—none wealthy that I know of—oppose what they consider an unfair tax—even immoral—triggered only by the act of dying.  Over 200 House members are co-sponsors of H.R. 86, by Rep. Chris Cox (R-CA).

   On the Social Security issue, a ‘monumental milestone’ was achieved recently when the House passed the ‘lock box’ concept by an overwhelming 416-12 vote.  To give credit, while Democrats in the House voted heavily for the lock box, it was a Republican-generated proposal.  Locking away every penny of the Social Security surplus is a monumental milestone, in my opinion.

   I came to Washington as a young reporter, in 1962, and even though I’m now 60 plus-- age-wise -- I still call a lady, who is 80 plus, for advice, my favorite senior, my mom.

   She told me recently ‘son, we know Social Security is safe for us seniors, but make sure it’s there for our children and grandchildren.’  Now I can tell her, here’s a plan, at last, to help do just that.  Seniors, you see, are painfully aware that previous Congresses have raided the Social Security Trust Fund to pay for other programs.  That’s why 60 Plus calls it a Bust Fund, not a Trust Fund.  The Social Security ‘lock box’ will preserve and protect the Trust Fund.
 

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Date: June 29, 1999

SENIORS, WHO NEED JOBS TO MAKE ENDS MEET, PAY THROUGH NOSE
Capitol Hill Press Conference: Release of IPI study
Statement by 60 Plus President Jim Martin

    Washington D.C. -- With budget surpluses as far as the naked eye can see, it’s time to lift a Depression-era tax that harms senior citizens who need to continue working to pay their bills.

    Senior citizens—‘seasoned citizens’ Rush Limbaugh calls us—those who Peter Jennings also labels as the World War II and post-World War II architects of this great democracy—these same ‘seasoned citizens’ face the highest marginal tax rates in the country due to the taxation of Social Security benefits.

    Adding insult to injury, ‘seasoned citizens’ under the age of 65 are penalized even further with an additional 50% tax—losing $1 of each $2 in benefits if they earn over $9,600 annually, and between the ages 65-69, they pay a 33% tax, losing 1$ of each $3 earned above $15,500.

    It’s time to abolish this Depression-era and post-World War II policy which was instituted to free up jobs for young workers.

    Jobs today go begging—not just minimum wage jobs either—but jobs paying 2, 3, 4 dollars per hour above minimum wage, jobs many seniors need to make ends meet.  Yet if seniors are hired they lose 33% to 50% of this extra income—amounting to thousands of dollars of lost wages each year.

    In previous Congresses, the 60 Plus Association has worked long and hard to help raise the earnings limit to its present $15,500 level, an amount which gradually grows to $30,000—slight relief for senior citizens.  A total lifting of this antiquated earnings limit is the ultimate solution.

    The nation’s economy will benefit in the long run as the study released here today illustrates.

    The Institute for Policy Innovation is, I believe, an aptly named think tank—always looking for innovative and creative ways to spur economic growth which benefits all citizens—seniors in this case—but elimination of this onerous tax on seniors is clearly an economic boost to their children and grandchildren who in many instances have been helping their elderly make ends meet.

    The study’s authors—those I call my economic gurus—Aldona and Gary Robbins—have once again provided a well researched and concisely written economic treatise showing the error of our ways in a policy that has outlived its usefulness.

    U.S. Senators John McCain (R-AZ) and Jon Kyl (R-AZ), as well as Reps. Sam Johnson (R-TX), Pete Sessions (R-TX), and Collin Peterson (D-MN) have authored legislation to repeal this tax.

    60 Plus salutes each and every sponsor and co-sponsor of this long overdue tax relief for ‘seasoned citizens.’

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Date: June 30, 1999

60 VOTES, 60 DAYS (NOW 70 DAYS), 60 PLUS SAYS THE COUNTDOWN CONTINUES, SENIORS GROUP PLANS TO KEEP SCORECARD ON SOCIAL SECURITY SURPLUS LOCK BOX VOTE
Capitol Hill Press Conference, Senate side
Statement by 60 Plus President Jim Martin

   Washington, D.C.— June 20, 1999 marked the 60th day since introduction of a Republican-generated concept to ‘lock away’ Social Security surpluses for future retirees.  On that date the 60 Plus Association, a national senior citizens group, urged Senate Democrats to provide the 60 votes needed to pass the ‘lock box’ proposal, which earlier cleared the House by a lopsided 416-12 vote, with 196 Democrats joining 220 Republicans.

   70 days have now passed without Senate action.  Senate Democrats have voted three times to block final passage.  Senate rules require 60 votes for a measure to be brought to the floor.  All 45 Senate Democrats voted to block it, while all 55 Senate Republicans favored it.

   The Senate is expected to vote again soon on the ‘lock box’ proposal.  60 Plus plans to monitor the Senate on a daily basis, a daily countdown, until Senate Democrats look in their hearts, set partisan politics aside, and do what 99% of their fellow House Democrats did, vote for the ‘lock box’ concept, something President Clinton now favors, to safeguard Social Security for future retirees.

   Placing the Social Security surplus into a ‘lock box’ is favored by 99% of the House, Democrats and Republicans alike, and by 100% of the 55 Republicans in the Senate, but 0% of the 45 Democrats. Surely 99% of House Democrats can’t be wrong.  They put politics aside and voted to do the right thing.  Surely a half-dozen Democrats in the Senate can do the same, especially now that President Clinton is for it.

   Senate Democrats just don’t get it.  Unfortunately, they’re living in the past, when scare tactics were regularly used to politicize Social Security.

   It’s a pleasure, at last, to endorse a plan to safeguard the Social Security surplus by locking away every penny of it.  I came to Washington as a young reporter, in 1962, and even though I’m now 60 plus -- age-wise -- I still call a lady, who is 80 plus for advice, my favorite senior, my mom.

   I can’t wait to tell her, I never thought I’d live to see the day politicians did the right thing and saved the Social Security surplus for what it was intended, future retirees.  Seniors, you see, are painfully aware that previous Congresses have raided the Social Security Trust Fund to pay for other programs.  That’s why 60 Plus calls it a Bust Fund, not a Trust Fund.

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The 60 Plus Association, on behalf of millions of senior citizens, strongly endorses the Medicare Patient Appeals Act of 1999, H.R. 2356. This bi-partisan legislation, co-sponsored by Reps. William Thomas (R-CA) and Fortney "Pete" Stark (D-CA), belongs on the must ‘pass list’ of the 106^th Congress.

Medicare delays and appeals are the cruelest form of punishment of the elderly. Medicare patients, who wait almost two years, on average, to resolve an appeal, have lost their patience. It’s way past time that the Health Care Financing Administration was held accountable for this unacceptable situation and that tight requirements be placed on the HCFA bureaucracy.

This legislation does just that. It imposes time frames on HCFA; provides a new patient right to external review, and replaces the current inefficient claim-by-claim appeals process with a means to resolve the underlying policy issue.

It is unacceptable that the Administration is demanding more accountability for HMOs when their own management of HCFA is truly harming America’s senior citizens. Thank goodness that Congress is acting to remedy an appeals process that makes the IRS code look simple.

I’m sorry, but senior citizens can’t afford a one-to-two year period in the appeals process. Time is not on their side. Clearly, an appeals process that sometimes survives longer than the patient is no appeals process: instead, all too often, it’s a ‘death knell’ for senior citizens.

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Washington, D.C.—In response to President Clinton’s threatened veto of the $800 billion dollar tax cut plan, H.R. 2488, 60 Plus President Jim Martin says "that’s hogwash. For the President to claim we need the money in Washington to ‘shore up Social Security and Medicare’ is sure demagoguery.

Until this Congress came along, the President’s party always spent the Social Security surpluses for other programs. The President knows full well that this Republican led Congress passed a ‘lock box’ provision, 416-12, to save the Social Security surplus money, and that 196 members of his own party joined their Republican colleagues. The President himself said a few weeks ago that he endorsed the Social Security ‘lock box’. So its rather disingenuous now for him to pretend that there is no remaining surplus to send the money back to these who sent it to Washington in the first place, the overtaxed taxpayers of America.

As for Medicare, President Clinton should heed his own Medicare Commission’s recommendation. Chaired by Senator John Breaux, a member of the President’s own party, the Commission offered coverage for prescription drugs for low-income seniors and significantly offered long-range reform of Medicare.

The President’s proposal to pour more money into a system that is slowly going bankrupt just adds to the problem in that his prescription drug coverage will cost $66 billion more than he estimated, according to the Congressional Budget Office (CBO). Republicans and Democrats on the Commission have offered a sensible prescription drug program to those low-income seniors. For the President to offer universal drug coverage to millions of seniors who already have that coverage is ridiculous. 1) Why should taxpayers subsidize people like Ross Perot who can afford the prescription drugs regardless, and 2) my fear is that companies that currently provide prescription drug coverage will drop seniors from their plans if they figure that Uncle Sam is going to pick up the tab.

As for the program ‘not costing the beneficiaries anything’ I see a replay of the catastrophic care fiasco 10 years ago when the so-called beneficiaries, i.e. seniors, were socked with a huge tax increase to pay for those benefits. That bill was repealed in record time. There’s no free lunch in this town."

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--This speech was included in the October 1st edition of Vital Speeches

 “Dying Should Not Be A Taxable Event”

Testimony of James L. Martin, President, 60 Plus Association

Senate Finance Committee, Senate of Pennsylvania

Monaca, Pennsylvania

July 23, 1999

 Madam Chairman and Members of the Senate Finance Committee,         

          I am James L. Martin, president of the 60 Plus Association, and it is indeed a pleasure to be here testifying before this distinguished committee.

This committee is considering an issue of very strong interest to me and my organization—the reduction and, hopefully, eventual repeal of the Pennsylvania inheritance tax, one of the highest, I might add, in our nation.

Let me now mention something about the 60 Plus Association.  We are a seven-year old, nonpartisan, national senior citizens’ advocacy organization that has as its main mission abolishment of the federal estate tax.

Congress has imposed a levy on everything that can conceivably be taxed: income, sales, property, gasoline, food -- the list is endless. A tax is extracted from fans who attend sports or other entertainment events, but a tax for dying?  Seniors say, rather emphatically, that DYING SHOULD NOT BE A TAXABLE EVENT!

60 Plus devotes a substantial portion of its resources to eliminating this most unfair and most confiscatory of all taxes.  It’s not a revenue raiser, producing only 1% of gross receipts.  It’s actually a revenue loser, a disincentive to job creation and thus more tax revenue.  It’s anti-family because nearly 90% of family-owned businesses don’t survive past a second generation due to the need to sell off assets to pay this tax.  That’s why Sen. Jon Kyl of Arizona and Rep. Chris Cox of California, the chief sponsors of repeal, call their legislation the Family Heritage Preservation Act. 

Benjamin Franklin proclaimed: “In this world nothing can be said to be certain, except death and taxes.”  However, as a result of the “death” tax, you can add a third: taxes AFTER death.

60 Plus has created the Benjamin Franklin Award to recognize the efforts of members of Congress in both parties who have sponsored legislation to repeal the “death” tax and make Franklin’s axiom true again.  

          60 Plus represents a half-million seniors nationally, with several thousand here in Pennsylvania, none wealthy that I know of, but who are outraged by the grim reality that they can be taxed just for dying.

          I hear from many of them.  One recently wrote, “At this time of life, we seniors should have the peace of mind that the fruits of our labors, after taxes, will be shared with our heirs.”

          Another said, “The inheritance tax is on top of several tiers of taxes.”

          Another: “Many farmers’ children have to sell the farm to pay this tax.”

          Another: “My elderly parents died, leaving us 5 children with a 600 acre farm.  Farm prices had risen greatly, resulting in heavy assessments of the inheritance tax.  Within three years, land values declined to where the land could not be sold for enough to pay for those taxes.”

          Another: “The more successful a citizen is in this great country, the more he is penalized, even when he dies.  Americans work very hard for themselves and their children and due to these unfair taxes, the children suffer.”

          Another: “It astounds me how much it costs to die.”

          Another: “Please ban this dumb law.”

          And finally, “All of us work hard for what we have, and a lot of that effort is motivated by the desire to provide for our spouse and give our children a better life...it matters that it gets passed on, intact, and whole, without government taking any more of this hard-earned legacy away from us.”

60 Plus does not believe that dying should be a taxable event.

We do not believe that families should have to deal with the Internal Revenue Service and the undertaker almost simultaneously.

We support the complete and total repeal of the federal estate tax.

However, we also realize another reality.  Despite the federal estate tax which essentially taxes assets which have already been taxed, there is a first cousin to Uncle Sam ready to collect again- - the tax collector in Harrisburg who hits the heirs again with an inheritance tax.

Pennsylvania was, I believe, the first state to adopt an inheritance tax. 

That current tax is six percent for lineal descendants and a whopping 15 percent for nonlineal descendants.

In a recent issue of Forbes magazine (June 14, 1999) featuring a story on the inheritance tax, Pennsylvania received the dubious distinction of being in the category “Grabbiest states.”

These were states that “impose an inheritance or death tax and have relatively high personal income or capital gains taxes.”  Pennsylvania was included as among “the worst states to die in.”

In addition, the inheritance tax may serve to encourage seniors to leave the state of Pennsylvania after retirement and to go to states that have no inheritance tax.  As New York Gov. George Pataki is fond of saying while working to abolish or lower his state’s inheritance tax: “New York’s seniors aren’t moving to Florida and Arizona just for the sunshine!”

Thirty-five states have no death or inheritance tax.  And the trend has been toward abolishing, or at least lowering inheritance taxes.

I was in North Carolina last year when the legislature met in late session and acted to repeal its inheritance tax.  I also testified last year in the state of Maryland and Maryland has started down the road to eventual repeal by cutting its inheritance tax.

Pennsylvania can join the parade of states chopping down one of the most confiscatory taxes—and it can do so to benefit its citizens, especially its senior citizens.

I commend Senator Melissa A. Hart, the Chairman of the Senate Finance Committee, for holding these hearings highlighting this important issue.

I commend her for her leadership in sponsoring Senate Bill 185 and her co-sponsors that would reduce the inheritance taxes on transfers to siblings from 15 percent to 6 percent. 

I also wanted to mention Senate Bill 318 introduced by Senator Jay Costa which would exempt the first $100,000 of the taxable value of an estate from the state’s inheritance, an exemption which would apply both to the 6 percent on transfer to family members and the 15 percent on transfers to other individuals.

Also, in this category of relief is Senator Jake Corman’s Senate Bill 827 which would reduce the inheritance on lineal descendants from 6 percent to 5 percent.

I note that these are proposals offered and co-sponsored by members from both political parties and that’s encouraging.

Let me mention another issue of special concern to seniors and which is also within the jurisdiction of this committee.  This matter is the long-term care issue, a matter of growing concern to seniors and to their children.

Planning ahead is the key to taking care of this issue as more and more of our seniors are living to a ripe old age.

We enthusiastically support Chairman Hart’s bill, Senate Bill 1456, that would give inheritance tax exemptions for long term care insurance premiums paid up to 10 years prior to an individual’s death.  Everyone benefits from this situation—care will be provided for seniors if needed; families save money; taxpayers save money.

This committee has the opportunity to really help seniors.  I urge you to lift this burden from the back of seniors and their heirs.  Seniors throughout Pennsylvania will be grateful to all of you.

Now, I’d like to turn my attention briefly to the history of the federal estate, or as it’s commonly called, the death tax.

If the label ‘death’ tax seems uncommonly tasteless, let me assure you it has many other names much more grotesque, if you will, and all share one common thread.  They were born out of a sense of frustration by the bizarre fact that the tax is triggered for no other reason than death itself.

That’s why the 60 Plus Association’s battle cry is that DYING SHOULD NOT BE A TAXABLE EVENT!

Besides the death tax, it’s been called, in no uncertain language, the grave-robber’s tax, the grim reaper’s tax, a job-robbing tax, an anti-savings tax, a departure tax, an exit tax, a vulture tax, a cruel tax, a success tax, a voluntary tax . . . It seems we add another name weekly.

Perhaps a cruel tax, a name given it by Mr. William Morris, publisher of the Augusta (GA) Chronicle, a paper for which I was a reporter covering Congress when I went to Washington way back in 1962.  For what is more cruel than while grieving over the loss of a loved one, you must prepare for a visit by the first claimant in line, and he’s not even a blood relative, Uncle Sam, waiting with outstretched palm for up to 55% of your after tax assets.

The 60 Plus Association recognizes the federal estate tax and the state inheritance tax as “kissing cousins.”

          The federal estate is levied on the capital value of property changing hands at the death of the owner, and is fixed mainly by its total value, and the inheritance tax is levied on what is passed on to the heirs. 

          Usually wars have been the justification for adoption of a federal estate tax.  We had our first one in 1797, which paid for a buildup of the U.S. Navy during a time of tension with France.  Five years later (1802) it was repealed.

          Congress enacted it again 60 years later in 1862 for revenue raising during the Civil War and then it met repeal in 1870.  Our third venture in this area of taxation occurred with the Spanish-American War and it lasted from 1898 to 1902.

We have had the present federal estate tax since 1916, and have had some modifications in it in recent years.  For example, the exemption was $600,000 until it was bumped up to $625,000 last year and $650,000 this year, with it due to rise to $1,000,000 by the year 2006, unless it’s outright repealed.  By the way, the exemption in 1916 was $50, 000, far less than today’s $650,000 exemption.  However, adjusting for the growth in wealth, in today’s dollars, the exemption would have to be about 9 million to be comparable to that of 1916.  It’s interesting to note that while Congress is proud of this increase to $650,000, a retired farmer told 60 Plus he hoped Congress would stop doing him such favors, that he spent most of the increase on lawyers and accountants to figure out the maze of new tax regulation imposed by Congress. 

The 1916 tax was adopted to help the U.S. finance mobilization for the First World War.  As with so many taxes, it has remained in place since that time.  Fortunately, the Financial Freedom Act of 1999, which is being considered by the U.S. House of Representatives this week, phases out this tax after 10 years.  Although the 60 Plus Association favors complete and immediate repeal of the federal estate tax, we do support this phase-out measure as an important goal toward eventual repeal.

          Actually, the inheritance tax is one of the oldest forms of taxation we have in existence.  We find evidence of it in ancient Egypt and Greece.  A version similar to later models dates back at least to the Roman Empire, which levied a one-twentieth-portion tax on property inherited to pay for the pensions of veteran soldiers.

          Perhaps the real basis of the modern inheritance taxes springs from the Middle Ages.  Then, according to legal theory, the sovereign owned all the land and property and in this feudal arrangement permission of the sovereign was required to transfer any property upon the death of the owner.

          In cases where there were no direct descendants, relatives of the deceased were able to obtain the property through payment of an amount called “relief.” These “relief” payments can legitimately be viewed as the origins of the inheritance tax in such European countries as England, Spain, Portugal, and the Netherlands.

          Throughout history, various groups began pushing taxes on inheritance in order to achieve certain socially desirable end results: the ending of a concentration of wealth, redistributing wealth, and assuring an additional source of income for government.  The idea limiting inheritance became a popular platform item with some of the utopian socialist movements as one way to restrict control, ownership and additional accumulation of property.  Even Karl Marx and Friedrich Engels in “The Communist Manifesto” saw as one of the key measures of the proletariat gaining political supremacy in the more advanced countries a series of attacks on private property including abolition of all rights of inheritance.

          In the United States, for instance, we have had, and repealed federal estate taxes, but inheritance taxes have always been collected by individual states.

          Pennsylvania, in this regard, became famous or infamous, by levying the first state inheritance tax 173 years ago, in 1826.

          New York state did so in 1885.  By 1900, a total of 20 states had enacted inheritance taxes.  Wisconsin established a new trend in 1903 with two innovations: progressive rates for the inheritance tax and discrimination in rates based on relationship of the heirs to the deceased.

          The inheritance tax, as well as the federal estate tax, is triggered by one event: death. 

          Other states, over the intervening years, followed suit.  However, in recent years, the trend has been in the other direction, namely, repealing the state inheritance taxes.

          A decade ago a total of 26 states imposed some type of inheritance or estate tax (above their automatic cut of the federal estate tax).  This has fallen to 15 states.

          Thus, 35 states and the District of Columbia impose no inheritance taxes.

          In an informative article in Forbes magazine, writer Carrie Coolidge makes the interesting observation: “You can’t beat the Grim Reaper.  But you can outrun the state tax collector.”  (“Death traps,”

June 14, 1999).  She outlines the “Grabbiest states,” those states which impose an inheritance or death tax and have relatively high personal income or capital gains tax.  Pennsylvania is one of nine states to make the list of the “worst states to die in.”

          The other categories include “Better, but not good,” those states that impose an inheritance or death tax but have lower or no income or capital gains taxes.  Eight states fall into this category.

          And the next category is the “Estate-friendly” ones, which include states with no death or inheritance taxes.  And the final category embraces those states with no death or inheritance taxes and no personal or capital gains taxes.  Six states make up this ideal category.

          Perhaps the work of this committee will move Pennsylvania into one of those other and more desirable categories for their taxpayers.

              Interesting enough, we hear similar arguments every time this issue comes up, we hear about the loss of revenue, the loss of inequity in taxation and the loss of fairness in the system since only a small proportion of people pay.  Quite frankly, none of these arguments are very convincing.

          California repealed their inheritance tax by referendum in 1982.  Though only about 2 percent of population might have been affected, over 65 percent of the people voted to repeal.

          Proponents of repeal realize that inheritance taxes are unfair, cause people to move out of the state, and limit expansion of businesses, retards creation of jobs, and results in breakup of family property.

These negative trends should be especially of concern to states in the northeast such as Pennsylvania.  Again, as Governor Pataki observed, people are not moving to Florida and Arizona just for the sunshine.

To those who claim “death” tax repeal is a ‘tax cut for the rich,’ 60 Plus says, “that horse has long been dead, so please, dismount!” For the rich, the Bill Gateses, the Ted Turners, have lawyers and accountants to protect their after-tax assets with trusts and foundations, and who can blame them?  Even Oprah Winfrey has expressed her dissatisfaction with the realization that when she dies, Uncle Sam is first in line.  As she lamented on her TV show, she found that fact (quote) irritating, to say the least.   

An excerpt from her August 4, 1997 show is as follows:

 Here’s Mr. Herb Nass, a New York lawyer who has handled the estates of well-known millionaires and is the author of this book, “Wills of the Rich & Famous”  He’s seen the wills of scores of celebrities and can offer us some insight into what they may have been thinking when they drafted their last will and testament.  Let’s start with Jackie Kennedy Onassis.  What does her will say about her?

Mr. Nass: The bulk of her estate was left to her two children, John and Caroline.

Winfrey:  So all those things that were auctioned off--I had heard this, too, from some family members--they--they kept all the things that they really valued themselves and that they wanted themselves.

Mr. Nass:  Correct.  That auction netted over $34 million for her estate, though.  And those funds were paid to her two children, subject to estate tax.

Winfrey:  And isn’t that estate tax 55 percent?

Mr. Nass:  At that level of wealth, yes.  Her--her estate...

Winfrey:  Yes.  I think it’s so irritating that once I die, 55 percent of my money goes to the United States government.

Mr. Nass:  Well, you should give it away while you’re alive then.

Winfrey:  That’s what I’m trying to do.  You know why that’s irritating?  Because you would have already paid nearly 50 percent.

Mr. Nass:  Correct.  It’s really double tax.

Winfrey:  You would have already paid--it’s double tax.

Mr. Nass:  You’re taxed on your income and on your estate.  Alternatively....

Winfrey:  And therefore, when you leave like a house or you leave money to people, then they’re taxed 55 percent, so you’ve got to leave them enough so that once they’re taxed, they still have some money.

Mr. Nass:  Correct.  Correct.

Winfrey:  That’s why you always hear about people where their aunts left them houses of left them stuff and they can’t keep the house because the taxes are so much.

Mr. Nass:  Well, charity is one other alternative.  Sometimes wealthy people set up charitable foundations, which is a vehicle for avoiding the estate tax.

Winfrey:  You’re talking to me.

Mr. Nass:  I’m talking to you.

Winfrey:  Unbelievable.

          Coming up, how complete strangers got most of the money from Marilyn Monroe’s will.  Details on that when we come back.  Fifty-five percent--irritating.

Mr. Nass:  It is.  Wealth foundations are the way to go....

 ·        Instead, it’s actually small mom and pop businesses that are hurt the most, the Chester Thigpen’s, the Mississippi tree farmer, the 88-year-old grandson of slaves, who has testified before Congress and who has worked with 60 Plus to repeal the death tax, before he became too ill to travel.

·        It’s Chris Bennett, radio station owner in Seattle, Washington who points out that a chain of minority owned newspapers face extinction because they don’t have the liquid assets to pay this tax bill, including, according to Mr. Bennett, the Sun Reporter Group in the San Francisco Bay area, The Los Angeles Sentinel, The Chicago Daily Defender chain of newspapers, The Cleveland Call & Post as well as The Afro American Newspapers, an east coast chain which publishes in cities such as Richmond, Washington D.C., Baltimore, and Philadelphia, and also the New York Amsterdam News.

·        I’ve spoken with Alexis Scott Reeves, struggling to keep her paper, the Atlanta (GA) World, in the family after the death of the principal owner.

·        In the newspaper business in general, as Frank Blethen, publisher of the Seattle Times, likes to point out, there were 2,100 independently owned daily newspapers in the United States in 1910.  This number dropped to 700 in 1980 and today stands at approximately 300.  The burden of estate taxes is one of the largest challenges facing family-owned newspapers, a fact heartily agreed to by other veteran newspapermen, Arizona publishers Donovan Kramer Sr., and Donovan Kramer Jr.

·             Also, a study by Kennesaw State College, Marietta, Georgia, confirms that minority-owned companies, just starting out, find the tax a major hindrance to job expansion.  In that regard, Harry C. Alford Jr., President of the National Black Chamber of Commerce, has written an excellent editorial in which he makes the case that getting rid of the death tax “will start to create a needed legacy and begin a cycle of wealth building for blacks in this country.  That would be a great start to breaking the economic chains that bind us.”  He urges members of the Congressional Black Caucus to end the “death tax.”

 Repeal is not a liberal or conservative issue, either.  To social redistributionists who have favored this tax as a “means to social justice,” 60 Plus cites testimony by USC Law Professor Edward J. McCaffery who says that as an “unrequited liberal,” he now concludes that the tax is hurting those it was intended to help, because of its hindrance to job expansion, and serious thought should be given to repeal, a policy 60 Plus has always advocated.

          Various experts from across the political spectrum have centered their criticism on the motivation and reality of the estate and inheritance taxes.

          Two prominent liberal economists, Aaron and Alicia Munnell, noted the following in their study of the estate tax:

          “In short, the estate and gift taxes in the United States have failed to achieve their intended purposes.  They raise little revenue.  They impose large excess burdens.  They are unfair.”  (“Reassessing the Role for Wealth Transfer Taxes,” National Tax Journal, June 1992).

          And Nobel-prize winning conservative economist Milton Friedman poses it as a policy question:  “Finally, it seems illogical to say that a man is entitled to what he has produced by personal capacities or to the produce of the wealth he has accumulated, but that he is not entitled to pass any wealth on to his children; to say that a man may use his income for riotous living but may not give it to his heirs.”  (Capitalism and Freedom, 1963).  To paraphrase Dr. Friedman, he indicates that the tax sends a bad message to savers, to wit: you may as well spend your money on wine and song, because Uncle Sam is going to get the largest piece of it.

          The evidence is in for all to see.  It is time for the death knell to be sounded for both the federal estate and state inheritance taxes.

          It is important to note, as I wrote in an opinion piece for The Washington Times (“The death tax is killing the family,” May 22, 1997) eliminating the estate tax, as well as the inheritance tax, is “not a tax cut for the rich.”  The real rich do not pay it as they have their lawyers, financial planners and accountants devise all types of means to avoid it.  The burden falls on middle-class Americans who may lack liquid assets but find that a family tree farm, a small business or a ranch must be sold to pay for the federal estate tax and/or inheritance taxes.  The 60 Plus Association has championed the cause of Mr. Thigpen, the 88-year Mississippi tree farmer and a grandson of slaves, whose ecology-winning tree farm may have to be sold when he passes on.  He is cash poor but has property.  He wants to leave that farm to his wife and five children but the federal estate tax and the Mississippi inheritance taxes will stand in the way.

The inheritance tax is harmful to a wide range of people.  We want to encourage minorities and women to get more involved in owning businesses. We can see that the federal estate tax and a state inheritance tax can be detriments and can limit opportunities.

The 60 Plus Association commissioned a public opinion poll on the death tax.  This poll was conducted by the Polling Company.  We asked whether the person would be More or Less likely to vote for a member of Congress if they voted to eliminate the death tax.  We found an overwhelming 77 percent would be more likely to vote for their Member of Congress if he or she voted to eliminate the death tax.  Not that they’re affected by it, but they cited the unfairness of a tax on assets which have already been taxed!

Opposition to this tax cuts across all demographic groups.  It is especially significant when we review whether individuals believe this tax is fair or unfair.    Here were the percentages:  Not-yet-moms (women aged 18 to 34 with no children), 86 percent; pre-retirees (voters aged 55 to 64), 84 percent; Liberals 74 percent; and those of a low socio-economic status (individuals with a high school diploma or less earning under $25,000), 73 percent.

          And in a very informative study by the Joint Economic Committee of the U.S. Congress (“The Economics of the Estate Tax,” December, 1998), it concludes that the estate tax generates costs to the taxpayers, the economy and the environment that far exceeds any benefits that it might produce.

          The study also considers the devastating impact of the tax on small and medium-sized family-owned businesses and the people they employ.  As you are aware, the maximum rate of 55 percent is imposed on estates with a value equal to or in excess of $3 million even is such value in comprised largely of non-liquid assets, which often is the case with family-owned and operated businesses and farms.  To prepare for expected death tax Liability, many businesses are forced to borrow funds, mortgage assets, pay expensive insurance premiums, and generally structure assets in an unproductive way that is purely tax motivated.  In the frequent case in which a family, upon the death of a patriarch or matriarch, is forced to liquidate all or a portion of the business to raise the cash necessary to pay the death tax, the same precious resources that are expended on death tax planning and liability could be more usefully applied towards reinvestment in business and the creation of new jobs.

          In sum, the study is most helpful in terms of documenting the negative collateral impacts of the death tax and in examining the degree to which repeal of the death tax would increase levels of savings and investment, expand the economy and result in higher federal tax receipts.

Among the new Joint Economic Committee findings are:

·        The Death Tax this century has reduced the stock of capital in the economy by approximately $497 billion.

·        The Death Tax causes inefficient allocation of resources, discouraging saving and investment and lowering the after-tax return on investments.

·        Death Tax rates are extremely punitive, with marginal rates from 37 percent to nearly 55 percent.

·        The Death Tax is a leading cause of dissolution for thousands of family-run businesses.

·        The Death Tax obstructs environmental conservation.  Large Death Tax bills often force families to sell environmentally sensitive land.

·        The Death Tax is a “virtue tax” because it penalizes work, saving and thrift in favor of large-scale consumption

·        Empirical and theoretical research indicates that the Death Tax fails to reduce inequality, and may actually increase inequality of consumption.

·        Enormous compliance cost associated with the Death Tax are of the same general magnitude as its revenue yield, or about $23 billion in 1998.

·        Thus, the Death Tax raises very little, if any, net revenue for the federal government.

           One very perceptive poem expresses this burden put on the taxpayers.  This anonymous poem is one we have circulated on Capitol Hill and has been placed in the Congressional Record.  It reads as follows:

 Tax his cow, tax his goat,

Tax his pants, tax his coat,

Tax his crops, tax his work,

Tax his tie, tax his shirt.

 Tax his tractor, tax his mule,

Teach him taxes are a rule,

Tax his oil, tax his gas,

Tax his notes, tax his cash;

 Tax him good and let him know,

After taxes he has no dough.

 If he hollers, tax him more;

Tax him ‘til he’s good and sore.

Tax his coffin, tax his grave,

Tax the sod in which he lays.

 Put these words upon his tomb:

“Taxes drove me to my doom.”

And after he’s gone, he can’t relax;

They’ll soon be after his Inheritance Tax!

 As a chief proponent of repeal has stated: “The absurdity of this tax is illustrated by the fact we’re issued a certificate at birth, a license at marriage, and a bill at death.”  That was a direct quote from Rep. Jennifer Dunn (R-WA), co-author of rate reduction leading to final repeal, along with Rep. John Tanner (D-TE).

A tax should benefit society but this one has no socially redeeming value, benefiting not society as a whole, but only a clutch of lawyers and accountants.  Actually, there are thousands of law firms making huge sums setting up trusts and foundations to help their clients avoid the tax.  But, happily, there are a number of attorneys who, believe it or not, are working to repeal this tax.  Most prominent among them, a first among equals, is Harold Apolinsky of Birmingham, Alabama, who points out that his firm has 10 trust and estate lawyers out of 120.  His firm believes that instead of losing work, there will be more legal fees once repeal is accomplished, due to job creation and start up of new businesses!

Seniors are hopping mad about a tax triggered only by the act of dying. 

          Let’s repeal this socially unconscionable negative revenue-producing, job-robbing tax a fourth and final time!

          I’ve lived and worked for nearly 37 years in Washington, starting as a young newspaper reporter covering Congress way back in 1962, when John F. Kennedy was in the White House, and Neil Armstrong had not yet walked on the moon.  Pennsylvania’s Senators then were Hugh Scott (Republican) and Joe Clark (Democrat) while the Governor was a young Republican named Bill Scranton.  So I’ve seen a lot of history come and a lot of history go and I’ve seen a lot of taxes come, but not many taxes go.

          But here’s one tax whose time to go.....has come!

          In addition, I sincerely hope the great Commonwealth of Pennsylvania will also join the other 35 states and repeal its inheritance tax.  Thank you for your time.

“Long Term Care:  Critical Issue for Senior Citizens” 

Remarks of James L. Martin, President, 60 Plus Association, at the Cato Policy Forum on Long Term Care Financing, October 13, 1999, Cato Institute, 1000 Massachusetts Ave., Washington, D.C., 4:00-5:30 P.M. 

Good Afternoon,

            It is a pleasure to appear here today before this Cato Forum on one of the most important issues facing our country—long-term care.

            The United States enjoys the best health care system in the world based largely on freedom of choice for doctors, flexibility in care provided and a healthy private insurance market.  We need to build on this strength for long-term care.

            I congratulate the organizers of this event.  I also wanted to compliment Steve Moses for the thoughtful work and important insights he presented in his paper “The Myth of Unaffordability.”

            Senior citizens have an important stake in this issue—as well as the rest of you in today’s audience.

            I serve as president of a national seniors advocacy group, the 60 Plus Association.  We are nonpartisan with about half a million members, about 1000 per Congressional District.  We lobby actively for the repeal of the federal death tax (or estate tax), Social Security personalization, Medicare reform and the need for long-term care insurance.

            Mr. Moses has pointed out some interesting facts on the need, the availability and the affordability of long-term care insurance.

            The Social Security system turned 64 years old this year and we at 60 Plus held a forum focusing on this event.  President Franklin D. Roosevelt noted when he signed the measure that it was not a complete retirement program.

            In fact, Social Security, long the “third rail” of politics (e.g., if politicians touch it they die) has become a third leg of retirement benefits—Social Security along with savings and pensions.

            If that is the case, then I believe long-term care insurance should be the long overdue fourth leg of the retirement stool. 

            In the long run, this fourth leg will save taxpayers millions of dollars by providing overdue long-term insurance for seniors.

            The latest federal survey of birth and death statistics in the United States by the National Center for Health Statistics has revealed that we are experiencing a record high in life expectancy, almost 77 years.

            The 60 Plus Association’s chairman, Former Congressman Roger Zion of Evansville, Indiana, who served four terms in the U.S. House of Representatives in the 1960s and 1970s, often says that because the U.S. retirement age was pegged at 65, simply because the actuarial tables said that’s when we died, then Mr. Zion puts out that he has been ‘statistically dead’ for 13 years—that’s of course part and parcel the problem facing the insolvency of Social Security and the graying of America raises the need for long-term care insurance.

            So people are living longer now, but they’re also living healthier in these later years because those statistics show the leading causes of death—heart disease, cancer, and strokes—are on a downward trend.

            More and more people will be living into their 80s, and 90s, and even over 100 years of age.

            The present seniors, and especially the Baby Boomers, will be living longer and longer.

            And there is one stark reality:  more and more people in this aging population will need long-term care.  A number of seniors will find that in their waning days time will be spent in a nursing home or assisted-care living facility.

            How are we going to cope with this challenge will be one of the big political questions we will face over the next few years.

            If we need to place this in short form, we can do so in two words:  “Educate and Legislate.”

            Educate so our society understands that long-term care is a major issue and must be dealt with now.  Legislate on the tax status of long-term insurance thus stimulating the growth of the private market.  We can meet this challenge but only by acting now.

            We need to educate individuals on the need for long-term care.

            Individuals in their 20s and 30s believe they are immortal, or at least indestructible.  Other people get sick but not them.  We must convince individuals that they need to invest in long-term care insurance.

            If individuals wait until they need it, then it is too late—and it becomes very expensive.  We are always going to find politicians who tell them ‘don’t worry, the government will take care of you.’

            We have found where that path leads.  Social Security, Medicare, and Medicaid are in financial crises—and are fighting to survive as is without the option of adding long-term care benefits.

            We can see the problem coming—and we must educate people to take responsibility while they can.  The best protection is self-protection, namely, purchasing long-term care insurance. 

            We are beginning to notice a change in attitude, as Mr. Moses points out, from a decade ago from “Who Needs Long-Term Care Insurance?” to “Everyone needs Long-Term Care Insurance.”

            The federal government has not helped the situation by providing through Medicaid and Medicare highly subsidized nursing home care and health home care.

            People just say ‘Oh, the government will take care of it.’

            Then we have politicians who try to convince the people that despite the shaky financial conditions of the programs I mentioned that we can add a full prescription benefit for seniors without any additional cost or we can lower the age

to admit individuals to Medicare without any harmful financial consequences.  Why do they think that if we can add more passengers and luggage to the Titanic, it will not sink?  That is not how it works in the real world.  We need to learn from our experience and benefit from it.

            I believe one of the most significant aspects of this paper is the finding by Mr. Moses that 70 to 80 percent of all Americans would purchase this long-term care if certain disincentives in the market place were removed.

            We have had some leaders in Congress such as Representative Nancy Johnson who have offered legislation allowing tax deductibility for long-term care.

Mrs. Johnson is a senior member of the powerful tax-writing House Ways and Means Committee.

            And in the recent tax bill, which President Bill Clinton vetoed, there were important provisions providing for health and long-term care insurance costs of individuals not participating in employer-subsidized plans.  There was also a provision for elderly patient care deduction.

            We need to provide both education as to the importance of long-term care insurance and market incentives to encourage and make such insurance attractive and affordable.  This is no area for “big government” solution.

            We will be working to educate our seniors, and in turn to encourage them to educate their children and grandchildren, on the necessity of long-term health insurance.

            Clearly, Mr. Moses’ excellent paper will help us move forward along this important roadway.  Thank you for attending this forum.

(Alexandria, VA) – 60 Plus Association is pleased that the House united in a bipartisan manner to approve legislation, the “Medicare Balanced Budget Refinement Act of 1999” (H.R. 3075) that will directly impact the pocketbooks of our nation’s seniors.  Senior citizens are grossly overcharged for their Medicare outpatient services and 60 Plus Association is working with the Medicare Outpatient Solution Coalition, which represents more than eleven million seniors, to rectify this inequity.      

“A loophole in Medicare law has resulted in seniors paying nearly twice as much for outpatient hospital services under Medicare than other Medicare services,” explained Jim Martin, president.  “The Balanced Budget Act of 1997 provides a remedy to this glitch, costing seniors billions each year, but will be phased in over 40 years, long after today’s seniors have passed away.”

The Medicare Payment Advisory Commission (MEDPAC) reported in March that “beneficiaries are liable for nearly 50% of the total payment to hospitals for these services, compared with 20% for most other Medicare covered services.”  Currently, hospitals are allowed to shift costs by charging beneficiaries more than 20% of what Medicare determines is a reasonable charge.  Since hospitals’ charges are generally much higher than Medicare’s costs, beneficiaries are responsible for a much larger share of the total bill.

“Section 214 of H.R. 3075 is the first step to addressing this inequity,” said Martin.  “The bipartisan effort to include Medicare outpatient co-payment fairness in the Act will cap out-of-pocket expenses for Medicare outpatient care at $776.  This provision will financially help seniors with expensive outpatient procedures but do little for the more routine procedures, for which they will be paying a higher share for many years to come.”       

“The Medicare Outpatient Solution Coalition looks forward to continuing to work with Congress on this very important issue,” added Martin.   “We believe that any final BBA fix legislation needs to take into account the tens of millions of seniors who rely on Medicare services and who can’t afford to be overcharged for any Medicare service.  The Medicare Outpatient Solution Coalition is working hard so that seniors no longer have to pay more than their fair share for Medicare services.”

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