I 
108TH CONGRESS 
1ST SESSION H. R. 2610
To amend the Internal Revenue Code of 1986 to restore the estate tax 
and repeal the carryover basis rule, to increase the estate and gift 
tax unified credit to an exclusion equivalent of $5,000,000, 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 
JUNE 26, 2003
Mr. PETERSON of Minnesota (for himself, Mr. LATHAM, Mr. CRAMER, Mr. 
BOEHNER, Mr. HALL, Mr. SIMPSON, Mr. DOOLEY of California, Mr. 
GUTKNECHT, Mr. BOSWELL, Mr. JANKLOW, Mr. LUCAS of Kentucky, 
and Ms. HARRIS) 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 restore 
the estate tax and repeal the carryover basis rule, to 
increase the estate and gift tax unified credit to an 
exclusion equivalent of $5,000,000, and to reduce the 
rate of the estate and gifts taxes to the generally applica-
ble 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. RESTORATION OF ESTATE TAX; REPEAL OF 
CARRYOVER BASIS. 
(a) IN GENERAL.—Subtitles A and E of title V of 
the Economic Growth and Tax Relief Reconciliation 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hereby repealed; and the Internal Revenue Code of 1986 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. 
(b) SUNSET NOT TO APPLY.—
(1) Subsection (a) of section 901 of the Eco-
nomic Growth and Tax Relief Reconciliation Act of 
2001 is amended by striking ‘‘this Act’’ and all that 
follows and inserting ‘‘this Act (other than title V) 
shall not apply to taxable, plan, or limitation years 
beginning after December 31, 2010.’’. 
(2) Subsection (b) of such section 901 is 
amended by striking ‘‘, estates, gifts, and transfers’’. 
(c) CONFORMING AMENDMENTS.—Subsections (d) 
and (e) 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made by such subsections, are hereby repealed; and the 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.
SEC. 2. ESTATE AND GIFT TAX RATES REDUCED TO 15 PER-
CENT OR, IF LOWER, THE GENERALLY APPLI-
CABLE CAPITAL GAINS RATE FOR INDIVID-
UALS. 
(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 15 percent or the rate contained 
in section 1(h)(1)(C).’’
(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
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, 2003. 
SEC. 3. $5,000,000 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 2, is amended by 
striking ‘‘the applicable exclusion amount’’ and all that 
follows and inserting ‘‘$5,000,000.’’. 
(b) GIFT TAX.—Paragraph (1) of section 2505(a) of 
such Code (relating to general rule) is amended by striking 
‘‘(determined as if the applicable exclusion amount were 
$1,000,000)’’.