I 
108TH CONGRESS 
1ST SESSION H. R. 2502
To amend the Internal Revenue Code of 1986 to reduce estate and gift 
tax rates, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 18, 2003
Mr. BEREUTER 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 reduce 
estate and gift tax rates, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Estate Tax Relief Act 
of 2003’’. 
SEC. 2. REDUCTION OF ESTATE TAX RATES. 
(a) IN GENERAL.—Section 2001 of the Internal Rev-
enue Code of 1986 (relating to estate tax) is amended by 
striking subsections (b) and (c) and by inserting after sub-
section (a) the following new subsections:
‘‘(b) COMPUTATION OF TAX.—The tax imposed by 
this section shall be applicable percentage of the amount 
equal to the excess (if any) of—
‘‘(1) 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 the preceding sentence, the term ‘applica-
ble percentage’ means the highest rate of tax applicable 
under section 1 for a taxable year beginning in the cal-
endar year in which the decedent dies (or, for purposes 
of section 2502, the gift is made). 
‘‘(c) ADJUSTED TAXABLE GIFTS.—For purposes of 
paragraph (1)(B), the term ‘adjusted 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 
estate of the decedent.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 2010(c) of such Code is amended by 
striking ‘‘the rate schedule set forth in section 
2001(c)’’ and inserting ‘‘section 2001’’.
(2) 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) a tax computed under section 2001 on 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.’’. 
(3) 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—
‘‘(1) the tax computed under section 2001 on 
the sum of the taxable gifts for such calendar year, 
over 
‘‘(2) the tax computed under section 2001 on 
the sum of the taxable gifts for each of the pre-
ceding calendar periods.
‘‘(b) TAX TO BE PAID BY DONOR.—The tax imposed 
by section 2501 shall be paid by the donor.’’. 
(4) Section 6601(j)(2)(A)(i) of such Code is 
amended by striking ‘‘the rate schedule set forth in 
section 2001(c)’’ and inserting ‘‘section 2001’’. 
(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. UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES 
INCREASED TO EXCLUSION EQUIVALENT OF 
$10,000,000; 
INFLATION 
ADJUSTMENT 
OF 
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 tax which would be determined under section 2001 if 
the amount with respect to which such tax is to be com-
puted were the applicable exclusion amount. For purposes 
of the preceding sentence, the applicable exclusion amount 
is $10,000,000.’’. 
(b) INFLATION ADJUSTMENT.—
(1) IN GENERAL.—Section 2010 of such Code 
is amended by redesignating subsection (d) as sub-
section (e) and by inserting after subsection (c) the 
following new subsection: 
‘‘(d) INFLATION ADJUSTMENT.—In the case of any 
decedent dying, and gift made, in a calendar year after 
2003, the $10,000,000 amount set forth in subsection (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 2002’ 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.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6018(a)(1) of such Code is amended by striking 
‘‘section 2010(c)’’ and inserting ‘‘section 2010’’. 
(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. 4. REPEAL OF ESTATE TAX BENEFIT FOR FAMILY-
OWNED BUSINESS INTERESTS. 
(a) IN GENERAL.—Section 2057 of the Internal Rev-
enue Code of 1986 (relating to family-owned business in-
terests) is hereby repealed.
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (10) of section 2031(c) of such 
Code is amended by inserting ‘‘(as in effect on the 
day before the date of the enactment of the Estate 
Tax Relief Act of 2001)’’ before the period. 
(2) The table of sections for part IV of sub-
chapter A of chapter 11 of such Code is amended by 
striking the item relating to section 2057. 
(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.
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