House Concurrent Resolution No. 30




            Whereas, on June 7, 2001, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 which included a repeal of the estate tax, but not until the year 2010; and


            Whereas, the Economic Growth and Tax Relief Reconciliation Act of 2001 also contained a sunset provision that brings the estate tax rules back in force in 2011, resulting in only a one-year reprieve from the estate tax; and


            Whereas, under the current estate tax, heirs receive assets with a stepped-up basis equal to the value of the asset on the date of death. Under the new rules set to take effect in 2011, the stepped-up basis will only apply to $4.3 million in assets passing to a spouse and $1.3 million in assets inherited by nonspouses, with all assets over those limits passed on without the stepped-up basis; and


            Whereas, the estate tax is the leading cause of dissolution of most small businesses, with 70% of businesses never passing to the next generation because of estate tax rates of 37% to 55%; and


            Whereas, estate tax revenues amount to only 1.5% of federal revenue, but according to the Cato Institute, compliance with the estate tax costs the economy as much as the Treasury collects just to enforce it; and


            Whereas, Americans overwhelmingly agree it is wrong to tax property and earnings that have already been taxed; and


            Whereas, the estate tax is contrary to the American values of saving and investment because it penalizes individuals for saving, investing, and building successful farms and businesses; and


            Whereas, on April 13, 2005, the United States House of Representatives voted to permanently repeal the estate tax, but the vote in the United States Senate scheduled for September 2005 was postponed so Congress could focus on Hurricane Katrina disaster relief; and


            Whereas, in January 2006, President Bush, Vice President Cheney, and Senate Majority Leader Frist have called for repeal of the estate tax with the following statements:


            (1) President Bush: "We thought it was unfair to say to a farmer and a small business owner, the government is going to tax you twice, so we put the death tax on the road to extinction....To keep this economy growing, to keep the entrepreneurial spirit alive, to make sure that the United States of America is the most productive nation in the world, the United States Congress must make the tax cuts permanent." (Chicago Board of Trade, 1/6/06);


            (2) Vice President Cheney: "We gave new incentives to small businesses to expand, and we put the unfair death tax on the road to extinction....For the sake of the economy, and for the people who make it go, Congress must not raise taxes, and we need to make the Bush tax cuts permanent." (Harley-Davidson Manufacturing Plant, Kansas City, Missouri, 1/6/06);


            (3) Senator Frist: "Sooner than later, I will take the elimination of the death tax to the Congress floor....Now is the time to kill the death tax forever." (American Farm Bureau Federation, 1/8/06); and


            Whereas, family farms and small family-owned businesses are especially vulnerable to the unfair estate tax because most farmers and small business owners, unlike corporate CEOs, have the entire value of their farm and business in their estate. While heirs to a family farm or family business work to carry an enterprise to the next generation, the government immediately "inherits" 37% to 55% of the estate, a blow that many family farms and small businesses cannot survive; and


            Whereas, the threat of the death tax forces family farmers and small business owners to spend thousands of dollars on accountants, lawyers, and financial planners so that they can try to ensure the survival of their family farms and small businesses after their death. For many family farmers and small business owners, they have worked a lifetime building an estate that the government has already taken its fair share from through the collection of income, property, and other taxes, and the estate should not be taxed again upon the owner's death:


            Now, therefore, be it resolved that the members of the House of Representatives of the Ninety-third General Assembly, Second Regular Session, the Senate concurring therein, hereby urge the United States Congress to immediately enact legislation that permanent repeals the estate tax which unfairly penalizes individuals for saving, investing, and building successful farms and businesses; and


            Be it further resolved that the Chief Clerk of the Missouri House of Representatives be instructed to prepare a properly inscribed copy of this resolution for each member of the Missouri Congressional delegation.