II

106TH CONGRESS

1ST SESSION S. 38

To amend the Internal Revenue Code of 1986 to phase out the estate

and gift taxes over a 10-year period.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. CAMPBELL (for himself, Mr. MACK, and Mrs. HUTCHISON) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to phase

out the estate and gift taxes over a 10-year period.

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 ‘‘Estate and Gift Tax

5 Rate Reduction Act of 1999’’.

6 SEC. 2. FINDINGS.

7 The Congress finds and declares that—

8 (1) estate and gift tax rates, which reach as

9 high as 55 percent of a decedent’s taxable estate,

10 are in most cases substantially in excess of the tax
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1 rates imposed on the same amount of regular income

2 and capital gains income; and

3 (2) a reduction in estate and gift tax rates to

4 a level more comparable with the rates of tax im5 posed on regular income and capital gains income

6 will make the estate and gift tax less confiscatory

7 and mitigate its negative impacts on American fami8 lies and businesses.

9 SEC. 3. PHASEOUT OF ESTATE AND GIFT TAXES.

10 (a) REPEAL OF ESTATE AND GIFT TAXES.—Subtitle

11 B of the Internal Revenue Code of 1986 (relating to estate

12 and gift taxes) is repealed effective with respect to estates

13 of decedents dying, and gifts made, after December 31,

14 2009.

15 (b) PHASEOUT OF TAX.—Subsection (c) of section

16 2001 of such Code (relating to imposition and rate of tax)

17 is amended by adding at the end the following new para18 graph:

19 ‘‘(3) PHASEOUT OF TAX.—In the case of es20 tates of decedents dying, and gifts made, during any

21 calendar year after 1999 and before 2010—

22 ‘‘(A) IN GENERAL.—The tentative tax

23 under this subsection shall be determined by

24 using a table prescribed by the Secretary (in

25 lieu of using the table contained in paragraph
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1 (1)) which is the same as such table; except

2 that—

3 ‘‘(i) each of the rates of tax shall be

4 reduced (but not below zero) by the num5 ber of percentage points determined under

6 subparagraph (B), and

7 ‘‘(ii) the amounts setting forth the tax

8 shall be adjusted to the extent necessary to

9 reflect the adjustments under clause (i).

10 ‘‘(B) PERCENTAGE POINTS OF REDUC11 TION.—

The number of

‘‘For calendar year: percentage points is:

2000 ......................................................................................... 5

2001 ......................................................................................... 10

2002 ......................................................................................... 15

2003 ......................................................................................... 20

2004 ......................................................................................... 25

2005 ......................................................................................... 30

2006 ......................................................................................... 35

2007 ......................................................................................... 40

2008 ......................................................................................... 45

2009 ......................................................................................... 50.

12 ‘‘(C) COORDINATION WITH PARAGRAPH

13 (2).—Paragraph (2) shall be applied by reduc14 ing the 55 percent percentage contained therein

15 by the number of percentage points determined

16 for such calendar year under subparagraph (B).

17 ‘‘(D) COORDINATION WITH CREDIT FOR

18 STATE DEATH TAXES.—Rules similar to the

19 rules of subparagraph (A) shall apply to the

20 table contained in section 2011(b) except that
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1 the number of percentage points referred to in

2 subparagraph (A)(i) shall be determined under

3 the following table:

The number of

‘‘For calendar year: percentage points is:

2000 ......................................................................................... 11⁄2

2001 ......................................................................................... 3

2002 ......................................................................................... 41⁄2

2003 ......................................................................................... 6

2004 ......................................................................................... 71⁄2

2005 ......................................................................................... 9

2006 ......................................................................................... 101⁄2

2007 ......................................................................................... 12

2008 ......................................................................................... 131⁄2

2009 ......................................................................................... 15.’’

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

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

6 gifts made, after December 31, 1999.

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