Taxation Update: August 1999

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Tax Cut Train Has Left the Station...Is White House Collision its Destination?

The House and Senate passed one of the largest tax cut bills in recent years when they approved a compromise conference report on the tax bill before adjourning for the August recess. The House bill passed by a 221 to 206 margin while the Senate vote was much closer at 50 to 49.

This 10 year, $792 billion tax cut package would use almost all of the budget surplus projected to grow outside of Social Security over the next decade. In order to appease moderate members of the Republican party, a "trigger" mechanism was added that would bar implementation of across-the-board tax cuts unless there was a reduction in the national debt....

Reforestation/Amortization Provisions Included in Tax-cut Package

Thanks to the efforts of timber owners, both large and small, provisions were included in the compromise tax-cut package to encourage replanting of trees. Specifically the provisions would increase the maximum reforestation expenses qualifying for amortization and the reforestation tax credit from $10,000 to $25,000.....

Estate Tax Relief Included in Compromise

While both the House of Representatives and the Senate inlcuded estate tax provisions in their tax bills, the approach was different in many respects. The conference committee compromise blended provisions from both bills but focused more on the approach taken in the House passed tax bill......

Modifications to Section 631(b) Capital Gains Treatment also Included

The Timber Tax Simplification Act of 1999, introduced in the House of Representatives by Rep. Mac Collins (R-GA) and in the Senate by Sen. Jeff Sessions (R-AL) and Paul Coverdell (R-GA) was also included in the compromise tax package expected to be sent to the President.....

 

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