I
106TH CONGRESS
2D SESSION
H. R. 4324
To amend the Internal Revenue Code of 1986 to increase the estate and
gift tax unified credit to an exclusion equivalent of $2,500,000 and
to reduce the rate of the estate and gifts taxes to the generally applicable
capital gains income tax rate.
IN THE HOUSE OF REPRESENTATIVES
APRIL 13, 2000
Mr. PETERSON of Minnesota (for himself, Mr. EWING, Mr. LATHAM, Mr.
THOMPSON of California, Mr. CONDIT, and Mr. HUNTER) 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 increase
the estate and gift tax unified credit to an exclusion
equivalent of $2,500,000 and to reduce the rate of the
estate and gifts taxes to the generally applicable capital
gains income tax rate.
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 20
PERCENT OR, IF LOWER, THE GENERALLY
APPLICABLE CAPITAL GAINS RATE FOR INDI-
VIDUALS.
(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.—
‘‘(1) IN GENERAL.—The tax imposed by this
section shall be the amount equal to the excess (if
any) of—
‘‘(A) the applicable percentage of the sum
of—
‘‘(i) the amount of the taxable estate,
and
‘‘(ii) the amount of the adjusted tax-
able gifts, over
‘‘(B) the aggregate amount of tax paid
under chapter 12 with respect to gifts made by
the decedent after December 31, 1976.
For purposes of subparagraph (A)(ii), the term ‘ad-
justed taxable gifts’ means the total amount of the
taxable gifts (within the meaning of section 2503)
made by the decedent after December 31, 1976,
other than gifts which are includible in the gross es-
tate of the decedent.
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the term ‘applicable percentage’
means the lesser of 20 percent or the rate contained
in section 1(h)(1)(C) (determined without regard to
section 1(h)(2)).’’
(2) CONFORMING AMENDMENTS.—
(A) Subsection (c) of section 2010 of such
Code is amended by striking ‘‘the applicable
credit amount’’ and all that follows through
‘‘the applicable exclusion amount’’ and inserting
‘‘the applicable credit amount shall be the ap-
plicable percentage (as defined in section
2001(b)(2)) 
of 
the 
applicable 
exclusion
amount’’.
(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) the applicable percentage (as defined in
section 2001(b)(2)) 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 (c) of section 2102 of such
Code is amended—
(i) by striking ‘‘$13,000’’ each place it
appears and inserting ‘‘$12,000’’, and
‘‘(ii) by striking ‘‘$46,800’’ and in-
serting ‘‘$35,000’’.
(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
the 
applicable 
percentage 
(as 
defined 
in 
section
2001(b)(2)) 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) EFFECTIVE DATE.—The amendments made by
this section shall apply to estates of decedents dying, and
gifts made, after December 31, 2000.
SEC. 2. $2,500,000 EXEMPTION FROM ESTATE AND GIFT
TAXES.
(a) IN GENERAL.—Subsection (c) of section 2010 of
the Internal Revenue Code of 1986 (relating to applicable
credit amount), as amended by section 1, is amended by
striking ‘‘the applicable exclusion amount’’ and all that
follows and inserting ‘‘$2,500,000.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to estates of decedents dying, and
gifts made, after December 31, 2000.
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