article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Estate and Gift Tax Phase-Out Act of 1997''. SEC. 2. FINDINGS. Congress finds the following: (1) The economy of the United States cannot achieve strong, sustained growth without adequate levels of savings to fuel productive activity. Inadequate savings have been shown to lead to lower productivity, stagnating wages, and reduced standards of living. (2) Savings levels in the United States have steadily declined over the past 25 years, and have lagged behind the industrialized trading partners of the United States. (3) These anemic savings levels have contributed to the country's long-term downward trend in real economic growth, which averaged close to 3.5 percent over the last 100 years but has slowed to 2.4 percent over the past quarter century. (4) Repealing the estate and gift tax would contribute to the goals of expanding savings and investment, boosting entrepreneurial activity, and expanding economic growth. (5) Abolishing the estate tax would restore a measure of fairness to the Federal tax system. Families should be able to pass on the fruits of labor to the next generation without realizing a taxable event. SEC. 3. PHASE-OUT OF ESTATE AND GIFT TAXES THROUGH INCREASE IN UNIFIED ESTATE AND GIFT TAX CREDIT. (a) Estate Tax Credit.-- (1) In general.--Section 2010(a) of the Internal Revenue Code of 1986 (relating to unified credit against estate tax) is amended by striking ``$192,800'' and inserting ``the applicable credit amount''. (2) Applicable credit amount.-- Section 2010 of such Code is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following: ``(c) Applicable Credit Amount.--For purposes of this section, the applicable credit amount is the amount of the tentative tax which would be determined under the rate schedule set forth in section 2001(c) if the amount with respect to which such tentative tax is to be computed were the applicable exclusion amount determined in accordance with the following table: ``In the case of estates of decedents The applicable dying, and gifts made, during: exclusion amount is: 1998............................... $1,000,000 1999............................... $1,500,000 2000............................... $2,000,000 2001............................... $2,500,000 2002............................... $5,000,000.''. (3) Conforming amendments.-- (A) Section 6018(a)(1) of such Code is amended by striking ``$600,000'' and inserting ``the applicable exclusion amount in effect under section 2010(c) for the calendar year which includes the date of death''. (B) Section 2001(c)(2) of such Code is amended by striking ``$21,040,000'' and inserting ``the amount at which the average tax rate under this section is 55 percent''. (C) Section 2102(c)(3)(A) of such Code is amended by striking ``$192,800'' and inserting ``the applicable credit amount in effect under section 2010(c) for the calendar year which includes the date of death''. (b) Unified Gift Tax Credit.--Section 2505(a)(1) of the Internal Revenue Code of 1986 (relating to unified credit against gift tax) is amended by striking ``$192,800'' and inserting ``the applicable credit amount in effect under section 2010(c) for such calendar year''. (c) Effective Date.--The amendments made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 1997. SEC. 4. REPEAL OF FEDERAL TRANSFER TAXES. (a) In General.--Subtitle B of the Internal Revenue Code of 1986 is repealed. (b) Effective Date.--The repeal made by subsection (a) shall apply to the estates of decedents dying, and gifts and generation-skipping transfers made, after December 31, 2002. (c) Technical and Conforming Changes.--The Secretary of the Treasury or the Secretary's delegate shall not later than 90 days after the effective date of this section, submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a draft of any technical and conforming changes in the Internal Revenue Code of 1986 which are necessary to reflect throughout such Code the changes in the substantive provisions of law made by this Act.
summary: Estate and Gift Tax Phase-Out Act of 1997 - Amends the Internal Revenue Code to phase-out and repeal, effective January 1, 2003, the estate tax, gift tax, and the tax on generation-skipping transfers.