04/08/1999 05:10 PM House WTR

HJR 34-REPEAL ESTATE AND GIFT TAX                                                                                               
                                                                                                                                
Number 0038                                                                                                                     
                                                                                                                                
CHAIR BARNES announced that the first order of business was House                                                               
Joint Resolution No. 34, relating to the federal estate and gift                                                                
taxes.  She asked Representative Coghill to come forward and                                                                    
testify on HJR 34.                                                                                                              
                                                                                                                                
Number 0090                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL, JR., Alaska State Legislature, came forward                                                             
to testify.  He stated that HJR 34 was a resolution asking the                                                                  
federal government to speed up the process of H.R. 86 which would                                                               
repeal the Internal Revenue Code of 1986, Subtitle B, and                                                                       
essentially eliminate the so-called "Death Tax".   He said that HJR
 was in existence because the estate tax in Alaska is tied                                                                    
directly to the Death Tax.  He indicated that "any dollar that we                                                               
get from the Death Tax or from the estate tax is directly tied to                                                               
that federal law; for example, if we repeal our estate tax, then it                                                             
all goes to the federal government."                                                                                            
                                                                                                                                
REPRESENTATIVE COGHILL further explained that there is a motion in                                                              
the United States Congress to repeal the Death Tax in order to                                                                  
ensure that American children receive the inheritance they are                                                                  
entitled to.  He stated that HJR 34 is a way to convey that "from                                                               
Alaska we think that taxing people after they have worked and                                                                   
actually paid taxes on the inheritance that they have is bad                                                                    
policy".  He asked that the federal estate and gift tax be repealed                                                             
in an expeditious manner.                                                                                                       
                                                                                                                                
REPRESENTATIVE COWDERY asked if limits existed on inheritance in                                                                
Alaska.  He wondered if it was "$600,000 per person before a tax                                                                
comes into place."                                                                                                              
                                                                                                                                
Number 0289                                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL replied that he understood it to be 20                                                                   
percent of the federal tax.  However, he believed that the federal                                                              
tax would depend on the wage.  The federal tax could range from 35                                                              
percent to 55 percent depending on the size of the estate.                                                                      
                                                                                                                                
REPRESENTATIVE COWDERY rephrased his question to ask whether or not                                                             
there was an exact dollar limit on the size of the estate.                                                                      
                                                                                                                                
REPRESENTATIVE COGHILL responded that he did not believe a dollar                                                               
limit existed.                                                                                                                  
                                                                                                                                
REPRESENTATIVE GREEN agreed with Representative Coghill's response.                                                             
He wondered if an exact dollar limit existed for state tax, though.                                                             
                                                                                                                                
REPRESENTATIVE COGHILL replied that the computation at the state                                                                
level is just 20 percent of whatever the federal requirement is.                                                                
                                                                                                                                
Number 0415                                                                                                                     
                                                                                                                                
SCOTT KOHLHAAS, Membership Chairman, Alaska Libertarian Party,                                                                  
testified via teleconference from Anchorage in support of HJR 34.                                                               
He read the following testimony into the record:                                                                                
                                                                                                                                
     I am here today with a song in my heart to support House                                                                   
     Joint Resolution No. 34.  The estate tax is a                                                                              
     confiscatory tax.  It is a tax on dead people.  It is a                                                                    
     double tax because they have already paid taxes on it.                                                                     
     People spend their whole lives accumulating whatever they                                                                  
     can and the government decides:  "No. This is not going                                                                    
     to go to their children.  This will go to us."                                                                             
                                                                                                                                
     When I grew up, my dad used to tell me:  "Scott, we are                                                                    
     better than Russia because in Russia you cannot own                                                                        
     property, but here you can."  I believed in that.  I                                                                       
     thought we were different, and I thought we were better,                                                                   
     but then I grew up and I learned about things like the                                                                     
     property tax and the inheritance tax and the gift tax.                                                                     
     I learned that our government, too, believes that really                                                                   
     they own everything and that it should all go back to                                                                      
     them eventually.                                                                                                           
                                                                                                                                
     I have been thinking that if the government feels they                                                                     
     have assets - who cares?  It is the people without assets                                                                  
     that are voting us in.  Then I see something like this                                                                     
     sponsored by Representatives Coghill and Barnes, and I                                                                     
     have hope again.  I am here to ask you to vote for HJR 34                                                                  
     and help move along H.R. 86.  Let's get rid of the estate                                                                  
     and gift taxes.                                                                                                            
                                                                                                                                
CHAIR BARNES asked if any of the committee members had questions.                                                               
There were no questions.                                                                                                        
                                                                                                                                
Number 0590                                                                                                                     
                                                                                                                                
REPRESENTATIVE COWDERY made a motion to move HJR 34 with a zero                                                                 
fiscal note out of committee and asked for unanimous consent.                                                                   
There being no objections, HJR 34 moved from the House Special                                                                  
Committee on World Trade and State/Federal Relations.