Does Packwood tax plan favor simplicity over economics?
Article Abstract:
The tax reform bill authorized by the Senate Finance Committee, known as the Packwood plan, is evaluated for its possible effects on U.S. businesses, most notably the real estate industry. The Packwood plan would disallow investors' application of tax losses from passive investments (including real estate and equipment leasing limited partnership losses) against taxable income from other sources. This effective elimination of tax shelters could hurt the real estate development industry. Other side effects of the Packwood plan, such as lower interest rates and the elimination of capital gains tax rates, are also discussed. On the whole, the Packwood plan could be the lesser of two evils, since the tax reform bill in the House would raise U.S. corporations' tax burden to $139 billion per year, while the Packwood plan would increase corporation taxes by approximately $108 billion annually.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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Bentsen ascension reopens questions of federal tax policy
Article Abstract:
Senator Lloyd Bentsen, a Democrat from Texas, will chair the Finance Committee, succeeding his Republican forerunner, Bob Packwood. Bentsen is considered easier to deal with than Packwood, because Bentsen is more of a pragmatist. Some Washington "insiders" believe Bentsen may help corporations adversely affected by the Tax Reform Act of 1986, by initiating tax reforms that favor US businesses. Historically, Bentsen has worked for legislation that would lower capital gains tax rates and increase investment incentives in taxation areas. The economic difficulties faced by the real estate, insurance, and oil industries in his home state may also encourage Bentsen to develop tax-relieving legislation for US businesses. The issues that the Democratic Finance Committee are expected to focus upon include: taxation of capital gains, cost recovery tax accounting, and international taxation.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1987
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'Uncertainty merges with unknown' in tax reform debate
Article Abstract:
The possibility of repeal of the investment tax credit is being discussed in the Senate Finance Committee, and corporations are structuring transactions around this possibility. For example, leasing companies have begun to enter into tax indemnification agreements with lessees, so that if the investment tax credit is repealed, the lessee will pay the lessor an amount equal to the lost credit. Among other tax reforms considered by the Finance Committee are tax credits for equipment used by companies involved in industries that are suffering from foreign competition, and varying depreciation schedules for equipment and fixed asset investment according to industry of participation.
Publication Name: Cashflow Magazine
Subject: Business
ISSN: 0196-6227
Year: 1986
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