II

106TH CONGRESS

1ST SESSION S. 76

To phase-out and repeal the Federal estate and gift taxes and the tax

on generation-skipping transfers.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. LUGAR (for himself, Mr. HAGEL, Mr. ROBERTS, and Mr. HELMS) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To phase-out and 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 ‘‘Estate and Gift Tax

5 Phase-Out Act of 1999’’.

6 SEC. 2. FINDINGS.

7 Congress finds the following:

8 (1) The economy of the United States cannot

9 achieve strong, sustained growth without adequate

10 levels of savings to fuel productive activity. Inad-
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1 equate savings have been shown to lead to lower pro2 ductivity, stagnating wages, and reduced standards

3 of living.

4 (2) Savings levels in the United States have

5 steadily declined over the past 25 years, and have

6 lagged behind the industrialized trading partners of

7 the United States.

8 (3) These anemic savings levels have contrib9 uted to the country’s long-term downward trend in

10 real economic growth, which averaged close to 3.5

11 percent over the last 100 years but has slowed to 2.4

12 percent over the past quarter century.

13 (4) Repealing the estate and gift tax would con14 tribute to the goals of expanding savings and invest15 ment, boosting entrepreneurial activity, and expand16 ing economic growth.

17 (5) Abolishing the estate tax would restore a

18 measure of fairness to the Federal tax system. Fam19 ilies should be able to pass on the fruits of labor to

20 the next generation without realizing a taxable

21 event.

22 (6) Abolishing the estate tax would benefit the

23 preservation of family farms. Nearly 95 percent of

24 farms and ranches are owned by sole proprietors or

25 family partnerships, subjecting most of this property
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1 to estate taxes upon the death of the owner. Due to

2 the capital intensive nature of farming and its low

3 return on investment, farmers are 15 times more

4 likely to be subject to estate taxes than other Ameri5 cans.

6 SEC. 3. PHASE-OUT OF ESTATE AND GIFT TAXES THROUGH

7 INCREASE IN UNIFIED ESTATE AND GIFT TAX

8 CREDIT.

9 (a) IN GENERAL.—The table in section 2010(c) of

10 the Internal Revenue Code (relating to applicable credit

11 amount) is amended to read as follows:

‘‘In the case of estates of decedents The applicable

dying, and gifts made, during: exclusion amount is:

2000 ....................................................................... $1,000,000

2001 ....................................................................... $1,500,000

2002 ....................................................................... $2,000,000

2003 ....................................................................... $2,500,000

2004 ....................................................................... $5,000,000.’’.

12 (b) EFFECTIVE DATE.—The amendment made by

13 this section shall apply to the estates of decedents dying,

14 and gifts made, after December 31, 1997.

15 SEC. 4. REPEAL OF FEDERAL TRANSFER TAXES.

16 (a) IN GENERAL.—Subtitle B of the Internal Reve17 nue Code of 1986 is repealed.

18 (b) EFFECTIVE DATE.—The repeal made by sub19 section (a) shall apply to the estates of decedents dying,

20 and gifts and generation-skipping transfers made, after

21 December 31, 2004.
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1 (c) TECHNICAL AND CONFORMING CHANGES.—The

2 Secretary of the Treasury or the Secretary’s delegate shall

3 not later than 90 days after the effective date of this sec4 tion, submit to the Committee on Ways and Means of the

5 House of Representatives and the Committee on Finance

6 of the Senate a draft of any technical and conforming

7 changes in the Internal Revenue Code of 1986 which are

8 necessary to reflect throughout such Code the changes in

9 the substantive provisions of law made by this Act.

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