I 
109TH CONGRESS 
1ST SESSION H. R. 1568 
To amend the Internal Revenue Code of 1986 to permanently reduce estate 
and gift tax rates to 30 percent, to increase the exclusion equivalent 
of the unified credit to $10,000,000, and to increase the annual gift 
tax exclusion to $50,000. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 12, 2005 
Mr. LEACH (for himself, Mr. TANNER, and Mr. ABERCROMBIE) 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 permanently 
reduce estate and gift tax rates to 30 percent, to increase 
the exclusion equivalent of the unified credit to 
$10,000,000, and to increase the annual gift tax exclu-
sion to $50,000. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ESTATE AND GIFT TAX RATES REDUCED TO 30 
PERCENT. 
(a) ESTATE TAX.— 
(1) IN GENERAL.—Section 2001 of the Internal 
Revenue Code of 1986 (relating to estate tax) is
amended by striking subsections (b) and (c) and by 
inserting after subsection (a) the following new sub-
section: 
‘‘(b) COMPUTATION OF TAX.—The tax imposed by 
this section shall be the amount equal to the excess (if 
any) of— 
‘‘(1) 30 percent of the sum of— 
‘‘(A) the amount of the taxable estate, and 
‘‘(B) the amount of the adjusted taxable 
gifts, over 
‘‘(2) the aggregate amount of tax paid under 
chapter 12 with respect to gifts made by the dece-
dent after December 31, 1976. 
For purposes of paragraph (1)(B), the term ‘adjusted tax-
able gifts’ means the total amount of the taxable gifts 
(within the meaning of section 2503) made by the dece-
dent after December 31, 1976, other than gifts which are 
includible in the gross estate of the decedent.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 2010(c) of such Code is 
amended by striking ‘‘tentative’’ both places it 
appears and inserting ‘‘tax’’. 
(B) Subsection (b) of section 2101 of such 
Code is amended to read as follows:
‘‘(b) COMPUTATION OF TAX.—The tax imposed by 
this section shall be the amount equal to the excess (if 
any) of— 
‘‘(1) 30 percent of the sum of— 
‘‘(A) the amount of the taxable estate, and 
‘‘(B) the amount of the adjusted taxable 
gifts, over 
‘‘(2) the aggregate amount of tax paid under 
chapter 12 with respect to gifts made by the dece-
dent after December 31, 1976.’’. 
(C) Subsection (b) of section 2102 of such 
Code is amended— 
(i) by striking ‘‘$13,000’’ each place it 
appears and inserting ‘‘$20,000’’, and 
(ii) by striking ‘‘$46,800’’ and insert-
ing ‘‘$52,500’’. 
(D) Section 2201 is amended— 
(i) in subsection (a) by striking ‘‘the 
rate schedule set forth in subsection (c) 
shall be deemed to be the rate schedule set 
forth in section 2001(c)’’ and inserting 
‘‘the tax determined under subsection (c) 
shall be deemed to be the tax determined 
under section 2001(b)’’, and
(ii) in subsection (c) by striking ‘‘ten-
tative’’ each place it appears. 
(b) GIFT TAX.— 
(1) IN GENERAL.—Section 2502 of such Code 
is amended to read as follows: 
‘‘SEC. 2502. RATE OF TAX. 
‘‘(a) GENERAL RULE.—The tax imposed by section 
2501 for each calendar year shall be an amount equal to 
30 percent of the sum of the taxable gifts for such cal-
endar year. 
‘‘(b) TAX TO BE PAID BY DONOR.—The tax imposed 
by section 2501 shall be paid by the donor.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subchapter A of chapter 12 of such 
Code is amended by striking section 2504. 
(B) The table of sections for such sub-
chapter is amended by striking the item relat-
ing to section 2504. 
(c) ESTATE TAX RETAINED.— 
(1) IN GENERAL.—Section 901 of the Economic 
Growth and Tax Relief Reconciliation Act of 2001 
shall not apply to title V of such Act. 
(2) RETENTION.—Subtitles A and E of title V 
of the Economic Growth and Tax Relief Reconcili-
ation Act of 2001, and the amendments made by
such subtitles, are hereby repealed; and the Internal 
Revenue Code of 1986 shall be applied as if such 
subtitles, and amendments, had never been enacted. 
(3) CONFORMING
AMENDMENTS.—Subsections 
(d), (e), and (f)(3) of section 511 of the Economic 
Growth and Tax Relief Reconciliation Act of 2001, 
and the amendments made by such subsections, are 
hereby repealed; and the Internal Revenue Code of 
1986 shall be applied as if such subsections, and 
amendments, had never been enacted. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to estates of decedents dying, and 
gifts made, after the date of the enactment of this Act. 
SEC. 2. UNIFIED CREDIT INCREASED TO EQUIVALENT OF 
$10,000,000 EXCLUSION; INFLATION ADJUST-
MENT OF UNIFIED CREDIT. 
(a) IN GENERAL.—Subsection (c) of section 2010 of 
the Internal Revenue Code of 1986 (relating to applicable 
credit amount) is amended to read as follows: 
‘‘(c) APPLICABLE CREDIT AMOUNT.—For purposes 
of this section, the applicable credit amount is the amount 
of the tax which would be determined under section 
2001(b) if the amount with respect to which such tax is 
to be computed were the applicable exclusion amount. For
purposes of the preceding sentence, the applicable exclu-
sion amount is $10,000,000.’’. 
(b) INFLATION ADJUSTMENT.—Section 2010 of such 
Code is amended by redesignating subsection (d) as sub-
section (e) and by inserting after subsection (c) the fol-
lowing new subsection: 
‘‘(d) COST-OF-LIVING ADJUSTMENT.—In the case of 
any decedent dying, and gift made, in a calendar year 
after 2005, the $10,000,000 amount set forth in sub-
section (c) shall be increased by an amount equal to— 
‘‘(1) $10,000,000, multiplied by 
‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for such calendar year by sub-
stituting ‘calendar year 2004’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
If any amount as adjusted under the preceding sentence 
is not a multiple of $10,000, such amount shall be round-
ed to the nearest multiple of $10,000.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to estates of decedents dying, and 
gifts made, after the date of the enactment of this Act. 
SEC. 3. ANNUAL GIFT TAX EXCLUSION INCREASED TO 
$50,000. 
(a) IN GENERAL.—Subsection (b) of section 2503 of 
the Internal Revenue Code of 1986 (relating to exclusion
from gifts) is amended by striking ‘‘$10,000’’ each place 
it appears and inserting ‘‘$50,000’’. 
(b) RESETTING OF INFLATION ADJUSTMENT.—Para-
graph (2) of section 2503(b) of such Code is amended— 
(1) by striking ‘‘1998’’ and inserting ‘‘2005’’, 
and 
(2) by striking ‘‘1997’’ and inserting ‘‘2004’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to gifts made after December 31, 
2004. 
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