|
|
|
Letter to House and Senate Conferees Regarding Tax Cut Legislation |
|
To: Hon.
Bill Archer, Chairman Hon.
Charles Rangel, Ranking Minority Member Hon.
Richard Armey, Majority Leader Hon. Bill
Roth, Chairman Hon. Daniel
P. Moynihan, Ranking Minority Member Hon. Trent
Lott, Majority Leader From:
Kermit W. Richardson, Master (President) RE: Views and Positions of the National Grange Regarding the Conference Committee to Reconcile Differences Between the House and Senate Regarding the "Financial Freedom Act of 1999" and the "Taxpayer Refund Act of 1999." Date: 8/3/99 Founded in 1867, the National Grange is this nation's oldest general farm and rural public interest organization. Today, the National Grange represents approximately 300,000 members affiliated with 3,600 local chapters located in 37 states. I am pleased to offer the views and positions of the National Grange to the conference committee regarding the provisions of the House and Senate tax legislation that affect our members. I urge the members of the conference committee to review these recommendations and adopt those provisions supported by the National Grange. I. Broad Based Tax Relief Provisions-Adopt the 10% Across the Board Reduction in Tax Rates Provided in the House Legislation. The National Grange supports a tax system with the objective of developing an easier, less complicated and fairer income tax to the end that all wealth may bear its just and equal proportion of the expenses of our government. The Grange supports moving our income tax code to language that is written in precise, plain and understandable language. We support a "flattening" of our tax system and a return to the income tax brackets that were established in the Tax Reform Act of 1996. Therefore, the National Grange recommends that the conference committee adopt the House language which reduces both the regular and alternative minimum income tax rates by 10 percent over a 10 year period. II. Family Tax Relief-Adopt the Marriage Penalty Relief Provisions of the House Legislation. Adopt the Expanded Tax Exclusion for Foster Care Contained in the Senate Legislation. Adopt the Increased and Expanded Dependant Care Tax Credit and the Child Care Tax Credit Provisions of the Senate Legislation. The National Grange supports adjusting the income tax deductions for two income families by removing the "marriage penalty." Both pieces of legislation substantially achieve this goal but the House legislation implements the increase in the standard deduction on an accelerated basis compared to the Senate language. Therefore, the National Grange supports the House language for this provision. The National Grange also supports expanding the tax exclusion for foster care payments, increasing and expanding the dependent care tax credit, and providing additional tax credits for employer child care and child care resource and referrals contained in the Senate legislation. Adoption of these provisions will provide hard earned tax relief for working families. III. Savings and Investment Tax Relief- Adopt the Individual Capital Gains Rate Provisions of the House Legislation. The National Grange supports the abolishment of the federal capital gains tax. The reductions in the capital gains tax rates contained in the House legislation are a move in the right direction. IV. Education Tax Relief- Adopt the Liberalized Tax-Exempt Arbitrage Rebate Exceptions for Public School Construction Bonds in the House Legislation. Currently, public schools and educational facilities in rural areas account for 40 percent of the schools in the nation but receive only 20 percent of the federal funding for school construction and remodeling. Allowing rural school districts to retain a larger arbitrage rebate over a greater period of time will enable those rural public schools to have more financial resources for improving their facilities. V. Health Care Tax Relief -Adopt the Provisions Related to Above-the Line Deductions for Long Term Care Insurance Contained in the House Legislation. Adopt the Provisions for Additional Deductions for Caretakers of Elderly Family Members Contained in the Senate Legislation. Adopt the Provisions for Extended Availability of Medical Savings Accounts Contained in the House Legislation. The National Grange supports the tax deduction of privately held long term care insurance premiums. Both pieces of legislation would implement this tax policy. However the House language provides for quicker implementation so is preferred by the National Grange. The National Grange also supports providing additional tax relief for families that care for elderly relatives who otherwise would become residents of nursing homes. Because the Senate language provides a broader definition of eligible care receiving family members, the National Grange urges adoption of the Senate language for this provision. The National Grange strongly supports the continued availability and expansion of Medical Saving Accounts and urges the adoption of the House language on this provision. VI. Small Business Tax Relief- Adopt the Accelerated 100% Deduction for Health Insurance Premiums of Self Employed Individuals. Adopt the Increase in Section 179 Expensing. The National Grange strongly supports the immediate, full tax deduction of health insurance premiums for the self-employed. Both pieces of legislation contain similar language on this provision and either should be adopted by the committee. The National Grange also supports reinstatement of the Investment Tax Credit to an amount not to exceed $100,000 annually per taxpayer as a means of encouraging further private investment by small businesses and farmers. However, increasing the Section 179 expensing allowance from the present $19,000 per year to $30,000 per year has a similar intent and is therefore supported by the National Grange. VII. Death Tax Relief Provisions- Adopt the Phased in Repeal of Estate, Gift and Generation-Skipping Taxes Contained in the House Legislation. The National Grange supports the elimination of federal estate taxes. The House legislation achieves this goal. The Senate legislation, while making substantial improvements in the current estate, gift and generation skipping taxation system, does not. Therefore, the National Grange urges the adoption of the House language on this provision. VIII. Tax-exempt Organization Relief Provisions- Adopt the Modifications to Section 512(b)(13) to Exempt Income Received By a Tax-Exempt Organization from Closely Held Subsidaries from the Provisions of the Unrelated Business Income Tax When Fair Market Value Pricing is Used. Adopt the Above-the-Line Charitable Donation Provision of the Senate Legislation. Adopt the Language to Equalize the Mileage Reimbursement by Charitable Organizations that Volunteers May Take for Providing Donated Services as Equal the Rate Prescribed for Business Use. The National Grange supports the elimination of all income taxation on income raised by non-profit organizations, including income that is currently considered Unrelated Business Income. Adoption of the modifications to Section 512(b)(13) is movement in the right direction for this policy. The National Grange also supports allowing full tax deductions for charitable donations made by all tax payers, whether they itemize their deductions or not. The Senate language on this issue, providing for a limited above-the-line deduction for charitable donations by taxpayers who do not itemize, does not create a full deduction of charitable contributions, but is a move in the right direction and should be adopted by the conference committee. The National Grange also believes that volunteers who are reimbursed for donated services that benefit a charitable organization should be allowed to receive the same rate of reimbursement as prescribed for business use, without incurring any income tax liability. The provisions for exclusion of mileage reimbursement by charitable organizations contained in the House legislation is another important step in the right direction in this area and should be adopted by the committee. IX. Farm and Forestry Tax Relief - Adopt the Farm and Ranch Risk Management Account provisions of the Senate Legislation. Adopt the Provisions that Clarify that Farmer Income Averaging will Not Trigger the Alternative Minimum Tax Contained in the Senate Legislation. Adopt the Provisions of the House Legislation that Define Federal Production Payments to Farmers are Taxable in the Year They are Received. Adopt the Increased Reforestation Expenditures Eligible for Reforestation Credit from $10,000 to $25,000 Annually Contained in the Senate Language. The National Grange strongly supports the creation of Farm and Ranch Risk Management Accounts (FARRM) as a means to manage the risks of farming and reduce future need for federal natural or economic disaster payments to farmers. The committee is strongly urged to adopt the Seante language on this provision. The National Grange also strongly supports the use of income averaging by farmers. However, application of the alternative minimum tax in conjunction with income averaging has limited the value of income averaging to many farmers. The National Grange believes that the use of income averaging should not trigger implementation of the alternative minimum tax, and therefore recommends adoption of the Senate language on this provision. The National Grange believes that federal production payments to farmers should be taxable only in the year they are actually received by a farmer and not in the year they are authorized. The Committee should adopt the language of the House legislation on this provision. The National Grange supports a uniform application of all tax provisions affecting the timber management to all taxpayers regardless of the size of their timber holdings. Increasing the reforestation credit to $25,000 (over the current $10,000 limit) will move substantially toward that goal. The Senate language should be adopted for this provision. X. Renewable Energy Tax Credits- Adopt the Renewable Energy Tax Credits for Electricity Generated by Wind, Biomass and Poultry Manure Contained in the Senate Legislation with a Modification that the Term "Biomass" Include Liquid Fuels Derived from Open-Loop Agricultural Production, Such as Biodiesel and Ethanol. The National Grange supports the repeal of all laws and regulations that have blocked or discouraged the production of energy in the United States by private enterprise, including tax provisions that have discriminated against the development of agriculturally derived, renewable energy such as solid biomass, ethanol and biodiesel. We encourage the development of all forms of domestic renewable energy on an equal basis to reduce our nation's dependence on imported oil. We support the expanded eligibility for solid biomass and chicken manure fuels to qualify for renewable energy tax credits that are contained in the Senate legislation. However, we request that the committee amend the definition of eligible open-loop biomass fuels to include liquid fuels, such as ethanol and biodiesel.
|