About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

35 Tax Foundation's Washington News 1 (1984)

handle is hein.tera/wingnews0037 and id is 1 raw text is: TAX       FOUNDATION'S
WASHINGTON-                                                                    Fo
April 20, 1984                    vo.35   NO.   1
THE 1984 TAX AND SPENDING CHANGES: CRUCIAL CONFERENCE AHEAD
Just before leaving Washington.for its Easter recess, Congress moved
significantly closer to a temporary truce with President Reagan on taxing and
spending policies.
The formula for a compromise: A combination of relatively small
spending cuts, plus tax increases that may bite more sharply than many have
expected -- depending on the final wording of complicated new rules embodied in
the 1984 tax revisions.
Congress's aim is to reassure financial markets with a down payment
on deficit reductions, while deferring more drastic action until after the
November 6 elections. The vehicle: Budget resolutions that commit Congress to
trim up to $133 billion from planned expenditures over the next three years and
tax bills to raise nearly $50 billion in added revenue, for a total of up to
$182 billion in projected deficit reduction. Decisions on specific spending
cuts await legislative implementation in each House. The tax bills are ready
for conferees.
The House passed its tax bill on April 11. The Senate approved its
bill on April 13. Their many differences will have to be ironed out by a
Conference Committee, expected to begin work in early May. Crucial decisions on
effective dates and other key points will be hotly debated, mostly behind closed
doors. But some of the more important tax changes now in prospect can be
summarized as follows --
TAX CHANGES FOR BUSINESSES
Corporate Taxes. The Senate bill would prevent large companies from
using the benetits of graduated tax rates. The House bill does not include such
a provision.
Tax Shelters. New and tighter rules would apply under both House and
Senate bills to allocations of tax deductions (for expenses and losses) in
partnerships and corporate arrangements set up to maximize tax avoidance.
Promoters would have to register future shelter programs with the IRS.
Real Estate Depreciation. The Senate voted to lengthen the
depreciation period tor real estate from the 15 years authorized in the 1981 Tax
Act to 19 years in 1985 and to 18 years starting in 1986, and to reduce tax
credits for housing-rehabilitation projects. The House bill does not include
these provisions. A bitter fight in Conference is predicted.
Leasing. The sale of rights to tax benefits by government agencies,
nonprofit organizations and businesses with tax-deductible losses, depreciation
allowances and tax-credits -- often through sale-and-lease-back deals -- would
be curtailed under both House and Senate bills. Pending deals are sure to be
affected. If the Conferees make some of the changes retroactive, contracts

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most