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Congress Is Taking The Wrong Approach On Estate Tax Reform

Floor Speech

Location: Washington, DC

* Mr. MORAN of Kansas. Madam Speaker, farmers, ranchers, and other small businesses are the backbone of the Kansas economy. The ability to pass a business from one generation to the next is critical to a business's ongoing success. Rural America has enough trouble retaining a youthful workforce. The estate or ``death'' tax does not aid our efforts in promoting long term growth and curbing depopulation.

* A major obstacle to the continuity of a business is the estate tax. I have long sought a permanent repeal of the estate tax. This tax comprises less than one percent of U.S. revenues, but poses a substantial impediment to the growth of family farms and small businesses. H.R. 4154, Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, does not provide the necessary reforms. While the certainty provided by H.R. 4154 would be welcome, passage of this legislation reduced the chances to next to none that any significant changes will occur to estate taxes in the future. I have sponsored an alternative that, for a while, was expected to be brought to the House floor. While it does not do all that I would like; it is reasonable and continues to have the chance for broad bipartisan support.

* While I will continue to look for ways to achieve a full repeal, I believe the next best alternative, given today's political and economic climate, is H.R. 3905, the Estate Tax Relief Act of 2009. H.R. 3905 will exempt, from the estate tax, estates worth $3.5 million in 2009, increase the exemption to $5 million by the year 2019, and index the exemption to inflation to allow it to automatically increase in the years following 2019. Enacting exemptions at these levels should prevent a majority of Kansas' small businesses from being affected by the tax. H.R. 3905 will also reduce the maximum tax rate, for estates in excess of the exemption, to 35 percent by the year 2019.

* While I am encouraged to see the House's willingness to address this issue, I feel Congress has missed an opportunity. I could not support H.R. 4154 because I believe it did not sufficiently address the damaging consequences of the estate tax while limiting the chances that Congress will ultimately do so. It is apparent that the House is currently unwilling to consider a full repeal. Until Congress is ready for that discussion, I will continue to work for initiatives that alleviate financial pressure from our farmers, ranchers, and small business owners.

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