FROM THE COMMITTEE ON WAYS AND MEANS

FOR IMMEDIATE RELEASE, Contact: (202) 225-3625
May 26, 2000
No. FC 25-A

Archer Announces Committee Action on H.R. 8, the "Death Tax Elimination Act of 2000"

Congressman Bill Archer (R-TX), Chairman of the Committee on Ways and Means, today announced that on Thursday, May 25, 2000, the Committee ordered favorably reported, as amended, H.R. 8, the "Death Tax Elimination Act of 2000," by a recorded vote of 24 to 11.

DESCRIPTION OF H.R. 8 AS APPROVED:

The bill would provide for a phased-in repeal of estate, gift, and generation-skipping taxes. Prior to full repeal in 2010, the estate and gift tax rates (and the generation-skipping tax rate) would be reduced as follows. Beginning in 2001, the 55 percent tax rate and the 5 percent surtax would be repealed. Beginning in 2002, the highest rate would be 50 percent. Each of these rates would be reduced by 1 percentage point per year from 2003 through 2006, 1.5 percentage point in 2007, and 2 percentage points in 2008 and 2009. However, no rate would be reduced below the lowest general individual income tax rate for unmarried individuals and the highest rate would not be reduced below the highest general individual income tax rate for unmarried individuals. From 2003 through 2009, the State death tax credit rates would be reduced in proportion to the Federal estate and gift tax rate reductions. Beginning in 2001, the unified estate and gift tax credit would be replaced by an exemption. After repeal of the estate, gift, and generation skipping taxes, the basis of assets received from a decedent generally would be the basis of the decedent (i.e., carryover basis); however, current law basis step up rules would be retained for $3 million of assets left to a surviving spouse and $1.3 million of other assets left to any beneficiary (the $3 million and $1.3 million figures would be indexed for inflation).

The bill would make a number of simplifying changes to the generation-skipping tax prior to its repeal.

The bill would expand the availability of the estate tax rule for qualified conservation easements by modifying the distance requirements. Under the bill, the maximum distance of eligible land from a metropolitan area, national park, or wilderness area would be increased from 25 to 50 miles, and from an Urban National Forest, it would be increased from 10 to 25 miles. The bill would also clarify that the date for determining easement compliance would be the date on which the donation was made.