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104TH CONGRESS

1ST SESSION S. 628

To repeal the Federal estate and gift taxes and the tax on generationskipping transfers.

IN THE SENATE OF THE UNITED STATES

MARCH 27, 1995

Mr. KYL (for himself and Mr. HELMS) introduced the following bill; which was

read twice and referred to the Committee on Finance

A BILL

To repeal the Federal estate and gift taxes and the tax

on generation-skipping transfers.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Family Heritage Pres5 ervation Act’’.

6 SECTION 2. FINDINGS.

7 Congress finds that:

8 (1) Hard working American men and women

9 spend a lifetime saving to provide for their children

10 and grandchildren, paying taxes all the while.
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1 Throughout their lives, they pay taxes on the income

2 and gains from their labor and their investment. Be3 cause of the heavy burden of income taxes, property

4 taxes, and other levies, it is enormously difficult to

5 accumulate savings for a family’s future. Worst of

6 all, when the purpose of that hard earned saving is

7 about to be achieved, families discover that between

8 37 percent and 55 percent of their after-tax savings

9 is confiscated by Federal inheritance taxes.

10 (2) These transfer, estate, and gift taxes punish

11 lifelong habits of thrift; they discourage entrepre12 neurship; they penalize families; and they have a

13 negative effect on other tax revenue sources.

14 (3) These taxes raise almost no material reve15 nue for the Federal Government. In fiscal year

16 1994, they produced only 1 percent of total Federal

17 revenues.

18 (4) The waste and economic inefficiency caused

19 by inheritance taxes is well known. American fami20 lies employ legions of tax accountants and lawyers

21 each year to set up trusts and other prolix devices

22 designed to avoid these onerous levies. The make23 work imposed upon the economy comprises billions

24 of dollars.
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1 (5) In order to pay these excessive taxes, many

2 small businesses must liquidate all or part of their

3 assets. By causing business closures, these taxes

4 constrict business activity, increase unemployment,

5 and reduce tax revenues to the Federal Government.

6 (6) Independent analyses indicate that, were

7 these onerous taxes repealed, the Nation’s GDP,

8 Federal and State tax revenues, employment base,

9 and capital formation would increase substantially.

10 According to one such survey, repealing these taxes

11 would increase GDP by $79,220,000,000, create

12 228,000 new jobs, and increase savings by

13 $630,000,000,000 by the end of the century.

14 (7) Repealing these taxes will ensure economic

15 fairness for all American families and businesses, as

16 well as economic growth and prosperity for the Na17 tion as a whole.

18 SECTION 3. REPEAL OF FEDERAL TRANSFER TAXES.

19 (a) GENERAL RULE.—Subtitle B of the Internal Rev20 enue Code of 1986 is hereby repealed.

21 (b) EFFECTIVE DATE.—The repeal made by sub22 section (a) shall apply to the estates of decedents dying,

23 and gifts and generation-skipping transfers made, after

24 the date of the enactment of this Act.

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