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 34 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 He asked that the federal estate and gift tax be repealed in an expeditious manner.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.