H. Res. 467
In the House of Representatives, U.S.,
April 11, 2000.
Whereas on February 7, 2000, President Clinton and Vice
President Gore submitted a budget for fiscal year 2001
that raises taxes and fees on working families by $116
billion over 5 years, creates 84 new Federal programs,
places Government spending increases on auto-pilot, and
fails to offer any serious proposal to strengthen Social
Security or Medicare;
Whereas over the next decade the Clinton-Gore budget would
spend $1.3 trillion on bigger Government—consuming 70
percent of the projected $1.9 trillion in budget sur-
pluses—thus spending more for the Federal bureaucracy,
and less for the American family;
Whereas as part of the $116 billion in tax and fee
increases—
(1) the President proposes to raise taxes by $12.8
billion on the insurance products which Americans rely
on to protect their families, homes, and businesses;
(2) the President proposes a stealth tax on our chil-
dren by raising the death tax by $3.5 billion;
(3) the President asks us to increase taxes on energy
by $1.5 billion at a time of rising energy prices and in-
creasing dependence on foreign oil; and
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(4) the President wants to raise Medicare premiums
and other health care costs by $3.2 billion at the very
time we are trying to insure our seniors’ health security
by preserving and protecting Medicare; and
Whereas the President’s solution is to take hard-earned
money and send it to Washington where politicians can
spend it: Now, therefore, be it
Resolved, That it is the sense of the House of Represent-
atives that—
(1) despite having successfully balanced the budget
and created budget surpluses;
(2) despite having protected social security and re-
stored the integrity of the Social Security Trust Fund;
(3) despite the fact that in 1999 governments at all
levels collected $9,562 in taxes for every man, woman
and child;
(4) despite the fact our tax burden is at 20.0 per-
cent of gross domestic product—a post-World War II
record high; and
(5) despite the fact that our oversight activities
have identified billions of taxpayer’s dollars that are sub-
ject to waste, fraud and abuse,
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the Congress should support the adoption of the package of
tax and user fee increases proposed by the Clinton/Gore ad-
ministration in their fiscal year 2001 budget, as reestimated
by the Joint Committee on Taxation, and as outlined below.
PROPOSED TAX AND FEE INCREASES
(Millions of dollars)
2000–05
I. PROPOSED TAX INCREASES
A. Corporate Tax Provisions
1. Five corporate tax provisions with general application ...............
2,340
2. Require accrual of time value element on forward sale of cor-
porate stock ..................................................................................
3. Modify treatment of ESOP as S corporation shareholder ..........
169
4. Limit dividend treatment for payments on self-amortizing stock
5. Prevent serial liquidations of U.S. subsidiaries of foreign cor-
porations .......................................................................................
6. Prevent capital gains avoidance through basis shift transactions
involving foreign shareholders ......................................................
270
7. Prevent mismatching of deductions and income inclusions in
transactions with related foreign persons ....................................
229
8. Prevent duplication or acceleration of loss through assumption
of liabilities ...................................................................................
9. Amend 80/20 company rules .......................................................
167
10. Modify corporate-owned life insurance (‘‘COLI’’) rules ............
2,026
11. Increase depreciation life by service term of tax-exempt use
property leases .............................................................................
B. Financial Products
1. Require cash-method banks to accrue interest on short-term ob-
ligations ........................................................................................
2. Require current accrual of market discount by accrual method
taxpayers ......................................................................................
3. Modify and clarify certain rules relating to debt-for-debt ex-
changes .........................................................................................
136
4. Modify and clarify straddle rules .................................................
5. Provide generalized rules for all income-stripping transactions ..
6. Require ordinary treatment for options dealers and commodities
dealers ..........................................................................................
7. Prohibit tax deferral on contributions of appreciated property
to swap funds ...............................................................................
NR 1
C. Provisions Affecting Corporations and Pass-Through
Entities
1. Conform control test for tax-free incorporations, distributions,
and reorganizations ......................................................................
2. Treat receipt of tracking stock as property .................................
477
3. Require consistent treatment and provide basis allocation rules
for transfers of intangibles in certain nonrecognition trans-
actions ..........................................................................................
145
4. Modify tax treatment of certain reorganizations in which port-
folio interests in stock disappear .................................................
283
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PROPOSED TAX AND FEE INCREASES—Continued
(Millions of dollars)
2000–05
I. PROPOSED TAX INCREASES
5. Clarify definition of nonqualified preferred stock .......................
6. Clarify rules for payment of estimated taxes for certain deemed
asset sales .....................................................................................
120
7. Modify treatment of transfers to creditors in divisive reorga-
nizations .......................................................................................
8. Provide mandatory basis adjustments if partners have signifi-
cant built-in loss in partnership property ....................................
159
9. Modify treatment of closely-held REITs .....................................
10. Apply RIC excise tax to undistributed profits of REITs ..........
11. Allow RICs a dividends paid deduction for redemptions only if
the redemption represents a contraction in the RIC ...................
1,911
12. Require REMICs to be secondarily liable for the tax liability
of REMIC residual interest holders .............................................
13. Deny change in method treatment in tax-free transactions ......
14. Deny deduction for punitive damages .......................................
233
15. Repeal the lower-of-cost-or-market inventory accounting meth-
od ..................................................................................................
2,032
16. Disallow interest on debt allocable to tax-exempt obligations ...
17. Capitalization of commissions by mutual fund distributors ......
461
D. Cost Recovery Provisions
1. Provide consistent amortization periods for intangibles ..............
969
2. Establish specific class lives for utility grading costs .................
307
3. Extend the present-law intangibles amortization provisions to
acquisitions of sports franchises ..................................................
245
E. Insurance Provisions
1. Require recapture of policyholder surplus accounts ....................
1,622
2. Modify rules for capitalizing policy acquisition costs of insur-
ance companies .............................................................................
5,084
3. Increase the proration percentage for property and casualty in-
surance companies ........................................................................
323
4. Modify rules that apply to sales of life insurance contracts ........
140
5. Modify qualification rules for tax-exempt property and casualty
insurance companies .....................................................................
F. Tax-Exempt Organization Provisions
1. Subject investment income of trade associations to tax ..............
730
2. Penalty for failure to file Form 5227 ..........................................
G. Estate and Gift Tax Provisions
1. Restore phaseout of unified credit for large estates ....................
430
2. Require consistent valuation for estate and income tax purposes
3. Require basis allocation for part-sale, part-gift transactions ......
4. Eliminate the stepped-up basis in community property owned
by surviving spouse ......................................................................
229
5. Require that qualified terminable interest property for which a
marital deduction is allowed be included in the surviving
spouse’s estate ..............................................................................
6. Eliminate non-business valuation discounts ................................
2,985
7. Eliminate gift tax exemption for personal residence trusts ........
8. Eliminate the Crummey rule and modify requirements for an-
nual exclusion gifts .......................................................................