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106TH CONGRESS

1ST SESSION S. 75

To repeal the Federal estate and gift taxes and the tax on generationskipping 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 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 Repeal 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) Congress should work toward reforming the

14 entire Federal tax code to end its bias against sav15 ings and eliminate double taxation.

16 (5) Repealing the estate and gift tax would con17 tribute to the goals of expanding savings and invest18 ment, boosting entrepreneurial activity, and expand19 ing economic growth. The estate tax is harmful to

20 the economy because of its high marginal rates and

21 its multiple taxation of income.

22 (6) Abolishing the estate tax would restore a

23 measure of fairness to the Federal tax system. Fam24 ilies should be able to pass on the fruits of labor to
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1 the next generation without realizing a taxable

2 event.

3 (7) Abolishing the estate tax would benefit the

4 preservation of family farms. Nearly 95 percent of

5 farms and ranches are owned by sole proprietors or

6 family partnerships, subjecting most of this property

7 to estate taxes upon the death of the owner. Due to

8 the capital intensive nature of farming and its low

9 return on investment, farmers are 15 times more

10 likely to be subject to estate taxes than other Ameri11 cans.

12 SEC. 3. REPEAL OF FEDERAL TRANSFER TAXES.

13 (a) IN GENERAL.—Subtitle B of the Internal Reve14 nue Code of 1986 is hereby repealed.

15 (b) EFFECTIVE DATE.—The repeal made by sub16 section (a) shall apply to the estates of decedents dying,

17 and gifts and generation-skipping transfers made, after

18 the date of enactment of this Act.

19 (c) TECHNICAL AND CONFORMING CHANGES.—The

20 Secretary of the Treasury or the Secretary’s delegate

21 shall, as soon as practicable but in any event not later

22 than 90 days after the date of enactment of this Act, sub23 mit to the Committee on Ways and Means of the House

24 of Representatives and the Committee on Finance of the

25 Senate a draft of any technical and conforming changes
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1 in the Internal Revenue Code of 1986 which are necessary

2 to reflect throughout such Code the changes in the sub3 stantive provisions of law made by this Act.

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