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Gephardt: Estate Tax Repeal Handout to the Wealthy

Monday, April 21, 1997

OnLine

Repealing the estate and gift tax would be unfair to lower and middle-class Americans, but some relief may be needed, House Minority Leader Dick Gephardt, D-Mo., said April 20.

"It absolutely takes my breath that Republicans could make suggestions like this when we’re trying to balance the budget in good faith," Gephardt said on CBS’s Face The Nation.

Eliminating the estate and gift taxes would give $4.6 billion a year in tax relief to 1,700 of the nation’s wealthiest families, he added.

Repealing the estate and gift tax has been advocated by many GOP legislators, but granting limited relief has been supported by members of both parties.

Report criticizes Republican plan

A report released April 21 stated that estate tax cuts would benefit only the wealthy, while targeted cuts could help farms and family businesses.

"A large estate tax cut benefiting the wealthiest Americans is likely to be paid for through sharp reductions in programs that benefit low- and middle-income households who will never amass estates large enough to be subject to taxation," the report by the Center on Budget and Policy Priorities said.

The report estimated that the Senate Republican leadership tax plan (S. 2), sponsored by Senate Majority Leader Trent Lott, R-Miss., would cost $18 billion over the five-year period ending in 2002.

An analysis by the Internal Revenue Service of the 32,000 taxable estates filing in 1995 stated that 70% of the total estate taxes were paid by the 16% of estates with gross estimated values exceeding $2.5 million.

By contrast, targeted estate tax cuts under the Clinton proposal would be a "modest" $1.1 billion over the same period, according to the report.

"All farm property, regardless of size, accounted for less than one-half of one percent of all assets included in taxable estates. Family-owned business assets such as closely-held stocks, limited partnerships, and non-corporate businesses, accounted for less than 4% of the value of all taxable estates of less than $5 million," the report said.

The report also stated that the Senate Republican Leadership plan (S. 2) would decrease state tax revenues $1 billion by 2002 due to each state’s "pick-up" tax provision.

Joint Tax Panel Releases Report on Transportation Fuels: The Joint Tax Committee staff released a report April 21 (JCX-12-97) describing the Intercity Passenger Rail Trust Fund Act of 1997, S.436, and current law provisions relating to federal excise taxes on transportation motor fuels.

The report was issued in advance of a Senate Finance Committee hearing April 23 on the passenger rail bill, introduced earlier this year by Senate Finance Committee Chairman William Roth, R-Del., and Sen. Daniel Patrick Moynihan, D-N.Y., the committee’s ranking Democratic member.

The rail trust fund would receive an amount equal to 0.5 cents per gallon of the excise taxes imposed on gasoline, diesel fuel, and special motor fuels. Revenues in the fund would be made available to finance capital expenditures for Amtrak and other transportation services where Amtrak does not operate.