I

106TH CONGRESS

2D SESSION H. R. 5058

To amend the Internal Revenue Code of 1986 to reduce estate and gift

tax rates to 30 percent and to increase the exclusion equivalent of

the unified credit to $10,000,000.

IN THE HOUSE OF REPRESENTATIVES

JULY 27, 2000

Mr. LEACH introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to reduce

estate and gift tax rates to 30 percent and to increase

the exclusion equivalent of the unified credit to

$10,000,000.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. ESTATE AND GIFT TAX RATES REDUCED TO 30

4 PERCENT.

5 (a) ESTATE TAX.—

6 (1) IN GENERAL.—Section 2001 of the Internal

7 Revenue Code of 1986 (relating to estate tax) is

8 amended by striking subsections (b) and (c) and by
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1 inserting after subsection (a) the following new sub2 section:

3 ‘‘(b) COMPUTATION OF TAX.—The tax imposed by

4 this section shall be the amount equal to the excess (if

5 any) of—

6 ‘‘(1) 30 percent of the sum of—

7 ‘‘(A) the amount of the taxable estate, and

8 ‘‘(B) the amount of the adjusted taxable

9 gifts, over

10 ‘‘(2) the aggregate amount of tax paid under

11 chapter 12 with respect to gifts made by the dece12 dent after December 31, 1976.

13 For purposes of paragraph (1)(B), the term ‘adjusted tax14 able gifts’ means the total amount of the taxable gifts

15 (within the meaning of section 2503) made by the dece16 dent after December 31, 1976, other than gifts which are

17 includible in the gross estate of the decedent.’’

18 (2) CONFORMING AMENDMENTS.—

19 (A) Subsection (b) of section 2101 of such

20 Code is amended to read as follows:

21 ‘‘(b) COMPUTATION OF TAX.—The tax imposed by

22 this section shall be the amount equal to the excess (if

23 any) of—

24 ‘‘(1) 30 percent of the sum of—

25 ‘‘(A) the amount of the taxable estate, and
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1 ‘‘(B) the amount of the adjusted taxable

2 gifts, over

3 ‘‘(2) the aggregate amount of tax paid under

4 chapter 12 with respect to gifts made by the dece5 dent after December 31, 1976.’’

6 (B) Subsection (c) of section 2102 of such

7 Code is amended—

8 (i) by striking ‘‘$13,000’’ each place it

9 appears and inserting ‘‘$20,000’’, and

10 ‘‘(ii) by striking ‘‘$46,800’’ and in11 serting ‘‘$52,500’’.

12 (b) GIFT TAX.—

13 (1) IN GENERAL.—Section 2502 of such Code

14 is amended to read as follows:

15 ‘‘SEC. 2502. RATE OF TAX.

16 ‘‘(a) GENERAL RULE.—The tax imposed by section

17 2501 for each calendar year shall be an amount equal to

18 30 percent of the sum of the taxable gifts for such cal19 endar year.’’

20 ‘‘(b) TAX TO BE PAID BY DONOR.—The tax imposed

21 by section 2501 shall be paid by the donor.’’

22 (2) CONFORMING AMENDMENTS.—

23 (A) Subchapter A of chapter 12 of such

24 Code is amended by striking section 2504.
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1 (B) The table of sections for such sub2 chapter is amended by striking the item relat3 ing to section 2504.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to estates of decedents dying, and

6 gifts made, after the date of the enactment of this Act.

7 SEC. 2. UNIFIED CREDIT INCREASED TO EQUIVALENT OF

8 $10,000,000 EXCLUSION; INFLATION ADJUST9 MENT OF UNIFIED CREDIT.

10 (a) IN GENERAL.—Subsection (c) of section 2010 of

11 the Internal Revenue Code of 1986 (relating to applicable

12 credit amount) is amended by striking all that follows

13 ‘‘were the applicable exclusion amount’’ and inserting ‘‘.

14 For purposes of the preceding sentence, the applicable ex15 clusion amount is $10,000,000.’’

16 (b) INFLATION ADJUSTMENT.—Section 2010 of such

17 Code is amended by redesignating subsection (d) as sub18 section (e) and by inserting after subsection (c) the fol19 lowing new subsection:

20 ‘‘(d) COST-OF-LIVING ADJUSTMENT.—In the case of

21 any decedent dying, and gift made, in a calendar year

22 after 2001, the $10,000,000 amount set forth in sub23 section (c) shall be increased by an amount equal to—

24 ‘‘(1) $10,000,000, multiplied by
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1 ‘‘(2) the cost-of-living adjustment determined

2 under section 1(f)(3) for such calendar year by sub3 stituting ‘calendar year 2000’ for ‘calendar year

4 1992’ in subparagraph (B) thereof.

5 If any amount as adjusted under the preceding sentence

6 is not a multiple of $10,000, such amount shall be round7 ed to the nearest multiple of $10,000.’’

8 (c) CONFORMING AMENDMENT.—Subparagraph (A)

9 of section 2057(a)(3) of such Code is amended by striking

10 ‘‘$625,000’’ and inserting ‘‘the excess of the applicable ex11 clusion amount (determined without regard to this para12 graph) over $675,000’’.

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to estates of decedents dying, and

15 gifts made, after the date of the enactment of this Act.

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