Opening Statement of the Hon. Scott McInnis, M.C., Colorado

Hearing on President's Tax Relief Proposals

February 13, 2001

Mr. Chairman, it is with great optimism that I await today's opportunity to discuss legislative proposals to cut taxes for Americans. Today we look forward to the opportunity to work to lower marginal rates, reduce the marriage penalty, help Americans save for their children's education, enable middle class taxpayers to get proper credit for their charitable giving, and work toward ending the death tax. Since taking a seat on the Ways and Means Committee, I have championed the effort, along with some of my colleagues, to bury the death tax. I am pleased that this year we have a real opportunity to address some of the death tax's punitive operation on constituents in the Third District of Colorado and everywhere in the United States.

The case for killing the death tax is a compelling one, and at its basis is a rejection of the notion that the death of a loved one should be a taxable event. This concept is so absurd that only the federal government could have dreamed it up.

Let me put my opposition to the death tax in concrete terms. Take the case of Brookhart Building Centers in Montrose and Grand Junction, Colorado. After 52 years of doing business in western Colorado, Brookhart's owners were forced to sell their family owned business to a national chain because of the impending threat of having to pay the death tax. Rob Watt, who ran the business along with his aging mother and father prior to its sale, said at the time "[i]n order to protect our family and our current employees from a liquidation upon the death of [my parents], the best thing now would be to sell the company." The death tax sealed the fate of this family business, and I am firmly convinced that there is no sound argument to support the federal government imposing such an onerous tax that literally forces the sale of these family businesses. Moreover, Brookhart's owners sold it early in order to protect their employees, but many small business owners, ranchers and farmers don't realize the death tax will hit them, and their employees end up suffering because of it.

Derek Roberts of Livermore, Colorado tells a similar horror story about the impact of the death tax on his community. Derek, a fifth generation northern Colorado rancher, worries that the death tax will doom his family run operation, preventing his sons from becoming the sixth generation of Roberts to run the family ranch. The death tax has already claimed many of his neighbors in his community, "[w]e are one of only one or two or three ranchers left around here," he said in a letter to the editor in which he called for the elimination of the death tax. "One of the last to go was a family that had been there as long as ours. When the old folks died, the kids borrowed money to pay the taxes. Soon they had to start selling cattle to pay the interest. When they ran out of cattle, their 18,000 acre ranch was foreclosed and is now being developed. The family now lives in a trailer near town, and the father works as a highway flagman."

Stories like this are far too common in Colorado. And they raise the question why tax policy, specifically the death tax, is driving the development of ranch and farm land in our country. At a time so many people out there are asking policy makers for more open space, why is the death tax foreclosing our open space. Local land use planning can and should be done without the help of the federal death tax. As Derek Roberts makes clear, it is not the ranching family or farmer who benefited when his neighbor's ranch was eventually foreclosed. The community also lost a source of strength, because often it is these families who are foundations of the community's local institutions and charities. When the death tax bankrupts a family, the money is sent to Washington D.C., and the local community and family suffer as a result.

So, in closing, Mr. Chairman, I am excited that today Congress and the Bush Administration will have the first real opportunity to work on a broad tax cut for Americans, and I eagerly look forward to working with all who are seriously committed, as I am, to ending the penalty the death tax imposes on the Colorado's farmers, ranchers, small business owners, and everyone else who shares the American Dream.