[Congressional Record Volume 142, Number 126 (Friday, September 13, 1996)]
[Senate]
[Pages S10554-S10556]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. GRAMS:
S. 2072. A bill to amend the Internal Revenue Code of 1986 to
eliminate the requirement that States pay unemployment compensation on
the basis of services performed by election workers; to the Committee
on Finance.
the election workers unemployment reform act
Mr. GRAMS. Mr. President, I offer legislation that would
remove a costly and unnecessary burden imposed by Washington upon our
State and local governments.
Current Federal law requires States and counties to pay unemployment
tax and benefits for people who work as election officials--even if
they work as few as two days a year.
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This requirement has created a serious inequity for State and local
governments. Under the law, polling place officials are considered as
employees for unemployment insurance purposes, regardless of the number
of days they work. Local governments are liable for payment of
unemployment insurance for those election workers who apply for it
after the elections, since they are being ``laid off from the
employment through no fault of his or her own.'' As a consequence,
their unemployment benefits could far exceed the stipend they receive
for services on election day, because unemployment benefits are based
on income from the previous year.
During this time of belt-tightening at every level of government,
many communities are having difficulty financing even the most
fundamental activities, including election administration. Requiring
local governments to spend their precious tax dollars paying
unemployment benefits for such short-term employees would add a
tremendous financial burden to budgets that in many cases are already
strained to the breaking point.
Mr. President, this current requirement does more harm than good to
those it intends to protect. It hurts those civic-minded Americans who
play a vital role in our democratic system through their willingness to
serve as election officials, because it diverts limited public funds
that would otherwise be used to balance local budgets or increase the
salaries of election workers. It also makes it more difficult to retain
and recruit an adequate number of qualified people to serve as election
officials in our communities.
My legislation seeks to free our communities and the taxpayers from
this costly and unnecessary, federally imposed burden. It simply
eliminates the requirement that state and local governments must pay
unemployment compensation tax on the basis of services performed by
election workers. Instead, it gives the States the freedom to design
and run their own unemployment compensation programs for their election
workers.
I might add that according to the Congressional Budget Office, this
bill is budget neutral.
Mr. President, this is a reasonable and moderate attempt to correct
an inequity for our States, cities, and counties, whose budgets are
already tightly stretched providing the services upon which our
communities depend. I therefore urge my colleagues to support this
legislation.
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By Mr. THURMOND:
S. 2074. A bill to repeal the Federal estate and gift taxes and the
tax on generation-skipping transfers; to the Committee on Finance.
estate taxes legislation
Mr. THURMOND. Mr. President, I rise today to join my colleagues in
discussing reform of our tax system. I commend the Senator from
Georgia, for his leadership on this issue. I wish to address another
aspect of our unfair tax system--the estate tax.
Today I am introducing a bill to repeal the Federal estate and gift
taxes and the tax on generation-skipping transfers. This bill is very
simple. It repeals, in its entirety, subtitle B of the Internal Revenue
Code of 1986. This repeal is effective for estates of decedents dying
and gifts and generation-skipping transfers made after the date of
enactment.
Mr. President, the Federal estate and gift tax structure is perhaps
the most unfair and inefficient revenue source used by our Government.
First, these taxes represent multiple taxation on savings and
investment. Income is initially taxed when it is earned. If any of that
income is saved, the earnings on the savings are taxed. A third level
of taxation occurs as capital gains taxes are paid. Finally, after a
lifetime of savings and investment, estate and gift taxes are assessed.
Estate and gift tax rates are much higher than income tax rates.
Second, these taxes inhibit economic growth and job creation. Family
owned businesses, farms, and ranches are the source of most new jobs
created in the United States. Yet it is these family owned businesses
that are most affected by estate and gift taxes. In many cases, family
businesses do not have sufficient liquid assets to pay estate taxes
upon the death of the owner. Frequently the business is liquidated or
they sell the farm. As a result, jobs are lost and economic activity
ceases.
Estate and gift taxes further stifle economic growth because of the
increased cost for capital accumulation. When lifetime savings are
taxed at high rates, the incentive to save is reduced. Spending and
consumption replaces savings and investment. As a result, wage rates
and employment suffer.
Third, estate and gift taxes result in economic inefficiencies, as
taxpayers attempt to avoid or minimize these taxes, or allocate
resources for estate planning. A survey by the Center for the Study of
Taxation found that 80 percent of owners of family businesses reported
taking some steps to plan for estate taxes. Such mechanisms included
life insurance, buy/sell agreements, restructuring family partnerships
and trusts, and charitable bequests. According to a report on this
survey, 62 percent of the family businesses stated they would not have
spent the time or money on estate planning. They did so because they
felt estate and gift taxes threatened the survival of their businesses.
Mr. President, with all the negative economic consequences resulting
from estate and gift taxes, one must ask if these taxes are worth the
cost. I, and many others, have concluded they are not.
There is a misconception that such taxes only affect the very wealthy
and that these taxes generate large amounts of revenue. The fact is,
these taxes impact everyone, directly or indirectly. Furthermore, these
taxes are a minor revenue source for the Federal Government, accounting
for only 1 percent of total Federal receipts. The amounts actually
collected must be offset by the billions spent each year for
enforcement and compliance activities.
Mr. President, it is time to abolish Federal estate and gift taxes.
These taxes are unfair and inefficient. They hinder economic growth,
destroying family businesses and jobs. They result in resources being
diverted to estate planning activities, away from economic growth.
These consequences, as well as the actual costs of collecting these
taxes, do not justify such taxes or the minimal revenues they produce.
I urge my colleagues to support repeal of the Federal estate and gift
taxes. I ask unanimous consent that a copy of the bill be printed
following my remarks.
S. 2074
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Estate and Gift Taxes Repeal
Act of 1996''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The Federal estate and gift tax structure is an unfair
and inefficient revenue source. Such taxes represent a
multiple tax on earnings. After paying income taxes, capital
gains taxes, and property taxes, lifetime savings are finally
subjected to estate taxes at rates that are generally higher
than income tax rates.
(2) Owners of family-owned businesses and farms are among
those who suffer the greatest impact of such taxes. Many
businesses fail after the death of the founder because of
estate taxes. Families faced with these taxes are often
forced to liquidate farms or businesses to pay estate taxes.
In the process, jobs and financial security for family
members and employees are destroyed.
(3) The estate tax results in inefficiency in the economy
because of ``estate planning'' and other tax avoidance
mechanisms.
(4) Estate and gift taxes have a negative impact on
economic growth. Such taxes foster spending and consumption,
rather than savings and investment. Repeal of these taxes
would result in increased capital formation, additional jobs,
and a higher gross domestic product. Increased economic
activity and investments would also result in additional
personal and corporate income tax revenues.
(5) Estate and gift taxes are a minor revenue source for
the Federal Government. In fiscal year 1995, estate and gift
taxes accounted for only 1 percent of total Federal receipts.
Furthermore, the Government spends billions of dollars each
year for administrative and compliance costs for these taxes.
(6) The repeal of Federal estate and gift taxes is
consistent with and will be a major step toward establishing
a tax code based on fairness, simplicity, neutrality,
visibility, and stability.
SEC. 3. REPEAL OF FEDERAL TRANSFER TAXES.
(a) General Rule.--Subtitle B of the Internal Revenue Code
of 1986 is hereby repealed.
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(b) Effective Date.--The repeal made by subsection (a)
shall apply to the estates of decedents dying, and gifts and
generation-skipping transfers made, after the date of the
enactment of this Act.
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