**BACKGROUND INFORMATIONRELATING TO THEJOINT COMMITTEE ON TAXATION**

**JCX-4-99**

**February 3, 1999**

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**JOINT COMMITTEE ON TAXATION**

The Joint Committee on Taxation ("JCT") was established under the Revenue Act of 1926 and is theoldest joint committee of the Congress.  It is composed of five Members of the House Committeeon Ways & Means and five Members of the Senate Committee on Finance.  The Chairman and ViceChairman of the JCT are elected by the JCT members; these positions generally alternate each yearbetween the Chairmen of the Ways & Means and Finance Committees.

| **House**                      | **Senate**                        |
|--------------------------------|-----------------------------------|
| Bill Archer, Texas             | William V. Roth, Jr., Delaware    |
| Philip M. Crane, Illinois      | John H. Chafee, Rhode Island      |
| William M. Thomas, California  | Charles Grassley, Iowa            |
| Charles B. Rangel, New York    | Daniel Patrick Moynihan, New York |
| Fortney Pete Stark, California | Max Baucus, Montana               |

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**JCT STAFF**

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The JCT staff is available to any Member of Congress who would like assistance in formulating revenueproposals and examining the possible economic, legal, administrative, and revenue implications of suchproposals.

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**TAX LEGISLATION**

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In recent years, the JCT staff has prepared hearing pamphlets on fundamental tax reform, the marriagepenalty, estate and gift taxes, the individual alternative minimum tax, effective marginal income tax rates,the taxation of capital gains, tax incentives for savings, tax provisions relating to health care, tax complexityfor small business, and the restructuring of the Internal Revenue Service.

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**OTHER DUTIES**

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From time to time, the JCT staff is asked to undertake special studies or investigations.  For example, in theearly 1970's, the JCT staff was asked to review President Nixon's tax returns.  More recently, the JCT staffwas asked to investigate allegations of bias in the IRS handling of exempt organization matters.

The JCT staff also prepares special reports that are required by law or requested by a Member.  Beginningin 1999, the JCT staff is required by the Internal Revenue Service Restructuring and Reform Act of 1998 (the"IRS Reform Act") to prepare a complexity analysis of provisions contained in revenue legislation that areof widespread applicability to individuals and small business.  The JCT staff is also required under the IRSReform Act to (1) conduct a study of the interest and penalty provisions in the Internal Revenue Code, (2)conduct a separate study of taxpayer confidentiality, and (3) prepare materials in connection with annual jointhearings relating to IRS operations for calendar years 1999-2003.

Each year the JCT staff prepares and publishes a list of tax expenditures, as required by the CongressionalBudget and Impoundment Control Act of 1974 (the "Budget Act").  Tax expenditures are "revenue lossesattributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deductionfrom gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability." The most recent JCT tax expenditure report was published in December 1998.

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**REVENUE ESTIMATES**

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Any Member of Congress may request a revenue estimate for a tax proposal.  A written request signed bythe requesting Member should be sent to the Chief of Staff, Joint Committee on Taxation, 1015 LongworthHouse Office Building.  The request should describe in detail the proposal to be estimated (including theeffective date) and should include the name of a contact person in case there are questions about the proposal. Statutory language should be included if available.

Work on revenue estimates generally is done on a first-in first-out basis, with some exceptions made forpreviously estimated proposals.  Some responses take longer than others because of difficulties in obtainingdata and developing the necessary models.  When revenue legislation is pending in the House or the Senate,requests relating to such pending legislation receive higher priority.

When revenue estimates are completed, the requesting Member receives a written response from the JCTChief of Staff.  The response contains a brief summary of the proposal and the revenue estimate for theproposal.  The JCT staff does not provide verbal (telephone) responses to revenue requests.

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**ESTIMATING METHODOLOGY**

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The JCT staff strives to incorporate in its work the most recent advances in computer technology as well asadvances in econometric and statistical methods of analysis. The JCT staff conducts meetings at least onceeach year of its Advisory Board of expert economists to review general issues relating to the JCT's revenueestimating methodology.  All of the JCT econometric and microsimulation models are reviewed andrecalibrated on an annual basis.  In addition, a major ongoing project of the JCT staff involves researchingthe feasibility of and developing the capability to incorporate macroeconomic feedback in its future analysisof major Federal tax proposals.

The JCT staff will provide additional information regarding the data and methodology used to produce arevenue estimate upon request.  Members who would like this information  should contact the JCT Chief ofStaff.

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**DISTRIBUTIONAL ANALYSES**

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Distributional analyses generally are much more difficult to prepare than revenue estimates because (1) it isoften possible to measure the magnitude of the changes in total taxes paid without knowing how these taxchanges are allocated among income groups, (2) data on the income levels of the affected taxpayers are notalways available, and (3) in some cases, no reliable method is available to allocate to individuals the taxespaid by businesses.  The JCT staff will not provide distributional analyses for tax proposals in cases in whichthe effects of a proposal on different income groups cannot be measured with reasonable accuracy.

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**CONFIDENTIALITY OF REQUESTS**

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Any Member of Congress may request a revenue estimate of tax legislation which has been introduced orthat otherwise has entered the public domain.  When a revenue estimate has been included in a publiclyavailable document (e.g., a revenue table summarizing a markup proposal or the results of a markup), theestimate is made available to anyone upon request.

**JCT PUBLICATIONS**

	The JCT website (www.house.gov/jct) contains a listing of all JCT publications issued since 1981.  Copiesmay be obtained from the JCT documents room (1620 Longworth HOB), by calling (202) 225-2647, or bysending an e-mail request to publications.manager@jointtax.house.gov.  Publications issued in 1998 areavailable on the website for viewing or downloading.  Publications issued in 1999 generally will be availableon the website within one or two days of publication.

**JCT OFFICES**

	The JCT maintains offices on both the House and Senate sides of the Capitol.  The main JCT officesare located at: