Senate Floor Speech
Senator Kay Bailey Hutchison
July 12, 2000 -- Page: S6495

MRS. HUTCHISON. Mr. President, I rise today to speak in favor of this bill. There is no question that what the Senator from New Jersey has just said has some resonance when you talk about paying dues to society.

But this is not money that has never been taxed before. This is money that was taxed when it was earned. It is money that was taxed when it was invested. It has been taxed and taxed and taxed. Who could say that an average family who now pays 40 percent of their income in taxes is not giving back enough to society?

On top of all of the taxes they paid on this money, now we are saying we want to change the American dream, which has always been to come to our country--come to America where you have the freedom to work as hard as you want to work, do as well as you want to do, and give your kids a better chance than you have. That is what the American dream has always been. Those who are against this tax are saying: No, no. That is not the American dream anymore. What we are saying in America is come to America and you can be this successful, and as long as you don't go beyond this, it is OK.

We should not put boundaries on success in America. That built our country. Hard work of people who are judged on what they are and not on who their grandparents were is what has built this country.

The estate tax takes away part of the incentive for people who work so hard to give their kids a better chance than they had.

It hurts small business. Seventy percent of all family-owned businesses do not survive through the second generation, and 87 percent don't make it to the third generation. That affects the small business itself, but it affects a lot of people who have jobs in those small businesses. It is the little people who are getting hurt because they don't have jobs anymore.

I have read stories where the main employer in a small town had a family-owned business and could not make it because they had to sell the assets of the business in order to pay inheritance taxes.

Among a survey of black-owned enterprises, nearly one-third say their heirs will have to sell the businesses to pay the death tax, and more than 80 percent report they do not have sufficient assets to pay the death tax. In fact, the president and CEO of the National Black Chamber of Commerce has written a letter in support of this bill because he says the total net worth of African Americans is only 1.2 percent versus 14 percent of the population.

The CEO of the National Black Chamber of Commerce supports the bill before us today. He said African Americans have been stuck at 1.2 percent of the total net worth of this country since the end of the Civil War in 1865, and that getting rid of the death tax will start to create a new legacy and begin a cycle of wealth building for blacks in this country.

The U.S. Hispanic Chamber of Commerce supports the bill before us today. They write: When one family loses its business due to the unfair estate tax, which really is a death tax, the face of an entire community changes. Employers become ex-employers. The economy suffers and a thriving self-supporting group of individuals vanish.

This is a gut issue for small businesses in our country.

The reason is that the assets of a small business are not readily sellable. The assets of a farm and a ranch are oftentimes valued at much more than their actual productivity. So if they have to have a valuation that puts them in the category of needing to pay an estate tax, they have no choice; they have to sell the land in order to pay that tax.

It is not right. It is not perpetuating the American dream.

Let me talk about conservation and the effect of the death tax on conservation. This is an article published in the Dallas Morning News, written by David Langford of San Antonio, the executive vice president of the Texas Wildlife Association. He says it so much better than I ever could.

Since 1851, my family has worked the land in the Texas Hill Country. Through the ups and downs of the past 148 years, we have run flour mills, farmed, ranched and offered hunting and fishing opportunities.

Our land also serves as a habitat for many species of birds, including two endangered migratory songbirds--the golden-cheeked warbler and the black-capped vireo. As a result, my family and I consider ourselves stewards of precious natural resources.

But as is the case for much of the wildlife habitat in this country, the estate tax threatens to tear it apart. The need to pay large estate tax bills often forces families to sell or develop environmentally sensitive land. The estate tax is the No. 1 destroyer of wildlife habitat in this country.

Although we have managed to hold our land together, it hasn't been easy. Before my mother died in 1993, we did everything we could to protect our family's land. Like millions of other family businesses, we paid accountants, tax attorneys and estate planners to help manage our assets in ways to avoid the tax, but it still came to this.

In order to pay the estate taxes and keep the land together when my mother died, we had to sell almost everything she owned, including her home. My wife and I had to sell nearly everything we owned, including our home, and move into a two-bedroom condominium. We also had to borrow money for 35 years from the Federal Land Bank.

Because the value of the land has increased since 1993, if we were killed in a car accident tomorrow, my children would owe more inheritance taxes than the amount I originally had to borrow to pay mine. But that isn't the end of the story. Not only would they pay more taxes than me, but they still would inherit my 35-year note that they would have to continue to pay.

Could my children then keep the land? The short answer is no. It probably would become a subdivision.

Mr. President, these are people whom I hear the other side keep calling `rich,' needing to pay their debt to society. These are people who care so much about the land that has been in their families since 1851 that they now live in a two-bedroom condominium to keep that land together.

That is not the American way. That is not right in this country. It is not good for the environment. It is not good for conservation. It is not good for small businesses that create jobs. And it doesn't produce 1 percent of the revenue of this country.

It sends a powerful message that you can only succeed in America this much, and if you have this much, we will take part of what you have worked so hard to earn, what your parents and grandparents may have worked so hard to give you, and we are going to say, I'm sorry, you've done too much.

Mr. President, that is not the American dream. I agree with the U.S. Hispanic Chamber of Commerce; I agree with the U.S. Black Chamber of Commerce. They want the opportunity for their members to create a stability through the generations for their families. I stand with the people who want to keep their land together, to keep a tradition in their families. That is the American way. I hope we will send this bill to the President.