text: 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.
target: 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.
feat_title: Estate and Gift Tax Phase-Out Act of 1997