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H.R. 640, Private Foundation Excise Tax Simplification Act of 2015 1 (February 5, 2015)

handle is hein.congrec/cbo2062 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE February 5, 2015 H.R. 640 would amend the Internal Revenue Code to restructure the excise tax on net investment income of private foundations from a dual-rate system (tax rates of 1 percent and 2 percent) to a single-rate system with a rate of 1 percent. Under current law, the calculation of the amount of excise tax differs depending on whether the foundation is exempt from income taxes or not, but in both cases a foundation faces a general excise tax rate of 2 percent on its net investment income. The rate of tax is reduced to 1 percent when a foundation has made charitable distributions in a year that exceed an amount based largely on its historical rate of distributions relative to its assets. The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 640 would reduce revenues, thus increasing federal budget deficits, by about $2.0 billion over the 2015-2025 period. The estimated budgetary effects of H.R. 640 are shown in the following table. By Fiscal Year, in Millions of Dollars 2015- 2015- 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2020 2025 CHANGES IN REVENUES Estimated Revenues * -129 -172 -180 -187 -195 -203 -212 -221 -230 -240 -863 -1,969 Source: Staff of the Joint Committee on Taxation. Note: * = less than $500,000. Although enacting H.R. 640 would affect revenues, the provisions of the Statutory Pay-As-You-Go Act of 2010 do not apply to the legislation because it includes a provision that would direct the Office of Management and Budget to exclude the estimated changes in revenues from the scorecards used to enforce the pay-as-you-go rules. JCT has determined that the bill contains no intergovernmental or private-sector mandates H.R. 640 Private Foundation Excise Tax Simplification Act of 2015 As ordered reported by the House Committee on Ways and Means on February 4, 2015

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