July 11, 2000
H.R. 8 - Death Tax Elimination Act of 2000
The Administration strongly opposes H.R. 8, which would repeal the estate
and gift taxes. Repeal of these taxes would be fiscally unwise, would
reduce the overall fairness and progressivity of the tax system, and would
harm charitable giving. The President would veto this legislation
repealing the estate and gift taxes if it were presented to him.
(Dunn (R) Washington and 244 cosponsors)
The Administration believes that such a tax reduction would harm the
important priorities of maintaining fiscal discipline, paying down the
national debt, extending the solvency of Medicare and Social Security, and
maintaining core government functions such as education and fighting crime.
It is dangerously backloaded. This legislation would cost close to $50
billion when fully phased in 2011, and would cost more than $750 billion
between 2011 and 2020 as the baby boom generation starts to retire.
Resources devoted to the repeal of the estate tax would not be available to
pay down the debt or fortify Social Security and Medicare.
The Administration supports efforts to appropriately target estate tax
relief, particularly for small business, family farms, and principal
residences. However, full repeal of the estate tax would undermine
fairness in the tax system. Only the wealthiest two percent of estates pay
any tax, and nearly half of estate tax revenue comes from the top 1 in
1,000 estates. In addition, recent studies suggest that repeal of the
estate tax could reduce charitable gifts and bequests by close to $6
The Administration worked with the Congress in 1997 to lift the burden of
the estate tax on the vast majority of small businesses and family farms.
The Administration would be pleased to work with the Congress to continue
to help relieve the estate tax burden on small businesses, family farms,
and principal residences, and to make the estate tax simpler and fairer in
a fiscally responsible way. The Administration understands that a
Democratic alternative will be offered to advance these goals. The
Administration would support these proposals as part of a balanced
framework that pays down debt, strengthens Social Security and Medicare,
provides tax relief to middle-income families, and funds critical
H.R. 8 would affect receipts; therefore, it is subject to the pay-as-you-go
requirements of the Omnibus Budget Reconciliation Act of 1990. The
magnitude of the proposed tax cut ($2.5 billion in FY 2001, according to
the Treasury Department) and the absence of any offsets could cause a
significant sequester of Federal resources.