The Death Tax Elimination Act (HR 8) would amend the Internal Revenue Code of 1986 to phase out the death (estate, gift and generation-skipping) tax during a 10-year period and was introduced by Reps. Jennifer Dunn (R-Wash.) and John Tanner (D-Tenn.) at the start of the 106th Congress. NRCA is a member of the Family Business Estate Tax Coalition, which has been working to get HR 8 approved by the House and Senate and signed by the president.

Because the death tax currently is so large, a deceased’s survivors often must liquidate assets to obtain enough cash to maintain an inherited business. The tax can easily be more than one-half of an estate. A study released by the Congressional Joint Economic Committee states that the death tax "generates costs to taxpayers, [and] the economy . . . that far exceed any potential benefits that it may arguably produce."

The study also found that the death tax is a leading cause of dissolution of family-run businesses. It diverts resources from investment and employment, and it raises little, if any, net revenue for the federal government.

On June 9, the House of Representatives voted 279-136 to pass the Death Tax Elimination Act (HR 8). Every Republican representative present and 65 Democratic representatives voted for the bill, with 20 members not voting. On July 14, the Senate voted in favor of the Death Tax Elimination Act by a vote of 59-39. With presidential approval, the bill would phase out the death tax over a 10-year period.

However, President Clinton vetoed the bill. The House was able to override the veto, but the Senate fell short of the two-thirds vote to override it. HR 8 promises to be a major issue during the upcoming presidential and congressional elections.