JCT Estimates Revenue Effects of Small Business Tax Bill
MAR. 10, 2000
JCX-27-00
DOCUMENT ATTRIBUTES
- Institutional AuthorsJoint Committee on TaxationHouse of RepresentativesSenate
- Code Sections
- Subject Area/Tax Topics
- Index Termslegislation, taxhealth care and insurance, self-employed personsdepreciation, expensing electionbusiness expense deduction, limits, meals and entertainmentestate taxlow-income housing, creditpension plans, cash or deferred arrangementsinstallment method
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2000-7406 (5 original pages)
- Tax Analysts Electronic Citation2000 TNT 49-75
Citations: JCX-27-00
=============== SUMMARY ===============
The Joint Committee on Taxation has estimated (JCX-27-00) the revenue effects over ten years of provisions in H.R. 3832, the Small Business Tax Fairness Act of 2000.
The bill would cost a net total of $122.7 billion over ten years, $78.3 billion of that from reductions in taxes on estates, gifts, and generation-skipping transfers. A phased-in increase in the business meals deduction from 50 percent to 60 percent would mean an outlay of $11.2 billion. An increase in section 179 expensing would cost $2.6 billion over ten years.
$6.1 billion would go to a pension provision to increase the limit on exclusion for elective deferrals. A package of pension provisions for enhancing fairness to women would run $5.2 billion.
The bill would also expand the low-income housing credit, create "renewal communities" with tax relief, and reinstate the installment accounting method for accrual basis taxpayers.
=============== FULL TEXT ===============
JOINT COMMITTEE ON TAXATION
March 10, 2000
JCX-27-00
ESTIMATED BUDGET EFFECTS OF H.R. 3832,
THE "SMALL BUSINESS TAX FAIRNESS ACT OF 2000"
Fiscal Years 2000 - 2010
[Millions of Dollars]
_____________________________________________________________________
Provision
[Effective] 2000 2001 2002 2003
_____________________________________________________________________
SMALL BUSINESS PROVISIONS
1. Accelerate 100% self-employed
health insurance deduction and
extend eligibility to those
who choose not to participate
in employer-subsidized health
plans
[tyba 12/31/00] --- -287 -1,093 -697
2. Increase section 179 expensing
to $30,000
[tyba 12/31/00] --- -359 -616 -350
3. Increase business meals
deduction (excluding enter-
tainment expenses) to 55% in
2001 and 60% in 2002 and
thereafter
[tyba 12/31/00] --- -259 -794 -1,090
4. 80% business meals deduction
for workers subject to DOT
hours of service limitation
[tyba 12/31/00] --- -39 -70 -64
5. Coordinate farmer income
averaging and the AMT and
provide the same income
averaging relief to
commercial fishermen
[tyba 12/31/00] --- -1 -2 -2
6. Repeal the occupational
taxes relating to distilled
spirits, wine, and beer
[7/1/01] --- -64 -75 -75
7. Permit installment method for
accrual basis taxpayers
[iso/a 12/17/99] -463 -657 -394 -249
TOTAL OF SMALL BUSINESS
PROVISIONS -463 -1,666 -3,044 -2,527
PENSION PROVISIONS
A. Provisions for Expanding
Coverage
1. Increase contribution and
benefit limits:
a. Increase limitation on
exclusion for elective
deferrals to $11,000 in 2001,
$12,000 in 2002, $13,000 in
2003, $14,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] --- -131 -317 -468
b. Increase limitation on
SIMPLE elective contribu-
tions to $7,000 in 2001,
$8,000 in 2002, $9,000 in
2003, $10,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] --- -5 -14 -22
c. Increase defined benefit
dollar limit to $160,000
[yba 12/31/00] --- -18 -31 -40
d. Lower early retirement age
to 62; lower normal retire-
ment age to 65
[yba 12/31/00] --- -3 -4 -4
e. Increase annual addition
limitation for defined
contribution plans to
$40,000 1
[yba 12/31/00] --- -6 -12 -14
f. Increase qualified plan
compensation limit to
$200,000 1
[yba 12/31/00] --- -43 -74 -84
g. Increase limits on defer-
rals under deferred compen-
sation plans of State and
local governments and tax-
exempt organizations to
$11,000 in 2001, $12,000 in
2002, $13,000 in 2003, and
$14,000 in 2004 1
[yba 12/31/00] --- -53 -93 -108
2. Plan loans for subchapter S
owners, partners, and
sole proprietors
[lma 12/31/00] --- -18 -30 -33
3. Modification of top-heavy
rules
[yba 12/31/00] --- -4 -9 -11
4. Elective deferrals not taken
into account for purposes of
deduction limits
[yba 12/31/00] --- -40 -75 -87
5. Repeal of coordination re-
quirements for deferred
compensation plans of State
and local governments
and tax-exempt organizations
[yba 12/31/00] --- -16 -22 -22
6. Elimination of user fee for
certain requests regarding
small employer pension plans;
waiver applies only for
request made during first
5 plan years 2
[rma 12/31/00] --- -9 -5 -5
7. Definition of compensation
for purposes of deduction
limits 1
[yba 12/31/00] --- -1 -2 -3
8. Option to treat elective
deferrals as after-tax con-
tributions
[tyba 12/31/00] --- 50 100 131
Subtotal of Provisions for
Expanding Coverage --- -297 -588 -770
B. Provisions for Enhancing
Fairness for Women
1. Additional catch-up contribu-
tions for individuals age 50
and above -- increase in maxi-
mum contribution limits for
pension plans by 10% annually
beginning in 2001, not to
exceed 40%
[yba 12/31/00] --- -74 -152 -131
2. Equitable treatment for
contributions of employees to
defined contribution plans 1
[yba 12/31/00] -- -51 -78 -84
3. Simplify and update the
minimum distribution rules by
modifying post-death distribu-
tion rules, reducing (to 10%)
the excise tax on failures to
make minimum distributions, and
directing the Treasury to sim-
plify and finalize regulations
relating to the minimum
distribution rules
[yba 12/31/00] --- -118 -212 -239
4. Clarification of tax treatment
of division of section 457
plan benefits upon divorce
[tdapma 12/31/00] Negligible Revenue Effect
5. Modification of safe harbor
relief for hardship
withdrawals from 401(k) plans
[yba 12/31/00] Negligible Revenue Effect
6. Faster vesting of certain
employer matching contributions
[pyba 12/31/00] Negligible Revenue Effect
Subtotal of Provisions for
Enhancing Fairness for Women --- -243 -442 -454
C. Provisions for Increasing
Portability for Participants
1. Rollovers allowed among govern-
mental section 457 plans,
section 403(b) plans, and
qualified plans
[dma 12/31/00] --- 26 -5 -5
2. Rollovers of IRAs to workplace
retirement plans
[dma 12/31/00] Negligible Revenue Effect
3. Rollovers of after-tax
retirement plan contributions
[dma 12/31/00] Negligible Revenue Effect
4. Waiver of 60-day rule
[dma 12/31/00] Negligible Revenue Effect
5. Treatment of forms of
qualified plan distributions
[yba 12/31/00] Negligible Revenue Effect
6. Rationalization of
restrictions on distributions
[da 12/31/00] Negligible Revenue Effect
7. Purchase of service credit in
governmental defined benefit
plans
[ta 12/31/00] Negligible Revenue Effect
8. Employers may disregard
rollovers for cash-out amounts
[da 12/31/00] Negligible Revenue Effect
9. Minimum distribution and
inclusion requirements for
section 457 plans
[da 12/31/00] Considered in Other Provisions
Subtotal of Provisions for
Increasing Portability for
Participants --- 26 -5 -5
D. Provisions for Strengthening
Pension Security and Enforcement
1. Phase-in repeal of 150% of
current liability funding
limit; extend maximum
deduction rule
[yba 12/31/00] --- -3 -14 -20
2. Excise tax relief for sound
pension funding
[yba 12/31/00] --- -2 -3 -3
3. Notice of significant
reduction in plan benefit
accruals
[pateo/a DOE] Negligible Revenue Effect
4. Repeal 100% of compensation
limit for multiemployer plans
[yba 12/31/00] --- -2 -4 -4
Subtotal of Provisions for
Strengthening Pension Security
and Enforcement --- -7 -21 -27
E. Provisions for Reducing
Regulatory Burdens
1. Modification of timing of
plan valuations
[pyba 12/31/00] Negligible Revenue Effect
2. ESOP dividends may be reinves-
ted without loss of dividend
deduction
[tyba 12/31/00] --- -19 -44 -56
3. Repeal transition rule
relating to certain highly
compensated employees
[pyba 12/31/00] --- -2 -3 -3
4. Employees of tax-exempt
entities 3
[DOE] Negligible Revenue Effect
5. Treatment of employer-provided
retirement advice
[yba 12/31/00] Negligible Revenue Effect
6. Pension plan reporting
simplification 3
[1/1/01] Negligible Revenue Effect
7. Improvement to Employee Plans
Compliance Resolution System 3
[DOE] Negligible Revenue Effect
8. Clarification of exclusion for
employer-provided transit passes
[tyba 12/31/00] --- -6 -10 -13
9. Repeal of multiple use test
[yba 12/31/00] Considered in Other Provisions
10. Flexibility in nondiscrimination
and line of business rules 3
[DOE] Negligible Revenue Effect
11. Extension to international
organization of moratorium on
application of certain non-
discrimination rules applicable
to State and local
government plans
[yba 12/31/00] Negligible Revenue Effect
12. Notice and consent period
regarding distributions
[yba 12/31/00] No Revenue Effect
Subtotal of Provisions for
Reducing Regulatory Burdens --- -27 -57 -72
F. Provisions Relating to Plan
Amendments
[DOE] No Revenue Effect
TOTAL OF PENSION PROVISIONS --- -548 -1,113 -1,328
ESTATE AND GIFT TAX RELIEF
PROVISIONS
1. Reduction in estate, gift,
and generation-skipping transfer
taxes: beginning in 2001, convert
the unified credit into a true
exemption, repeal the 5% "bubble"
(which phases out the lower
rates); repeal rates in excess
of 53%; in 2002, repeal rates in
excess of 50%; in 2003 through
2004, reduce all rates by 1
percentage point a year; propor-
tionately reduce State tax
credit rates
[dda & gma 12/31/00] --- --- -4,738 -6,358
2. Provide deemed allocation of
GST exemption
[ta 12/31/99] --- -1 -3 -4
3. Provide retroactive allocation
of GST for unnatural orders
of death
[generally ea 12/31/99] --- -4 -5 -6
4. Allow severances of trusts
holding property having an
inclusion ratio of greater
than zero Included in Estate and
[---] Gift Item 3.
5. Modify certain valuation rates Included in Estate and
[---] Gift Item 3.
6. Provide relief from late
elections Included in Estate and
[---] Gift Item 3.
7. Provide rule of substantial
compliance Included in Estate and
[---] Gift Item 3.
8. Expand estate tax rule for
conservation easements -- in-
crease the 25-mile limit to 50
miles; increase 10-mile limit
to 25 miles, and clarify that
that the date for determining
easement compliance
[dda 12/31/99 & dda 12/31/97] --- -11 -15 -21
TOTAL OF ESTATE AND GIFT TAX
RELIEF PROVISIONS --- -16 -4,761 -6,389
DISTRESSED COMMUNITIES AND
INDUSTRIES PROVISIONS
1. "American Community Renewal
Act of 1999" -- designate 15
renewal communities within 36
months; provide various incen-
tives (zero capital gains tax
on certain 5-year investments;
special deduction for real
estate revitalization expendi-
tures; special expensing for
certain business property; work
opportunity tax credit; environ-
mental remediation expenses;
family development accounts)
beginning 1/1/01 and ending
12/31/07
[DOE] --- -102 -197 -202
2. Increase maximum reforestation
expenses qualifying for amorti-
zation and credit from $10,000
to $25,000; remove cap on amor-
tization of reforestation costs
in 2001 through 2003
[tyba 12/31/00] --- -5 -15 -22
TOTAL OF DISTRESSED COMMUNITIES
AND INDUSTRIES PROVISIONS --- -107 -212 -224
REAL ESTATE PROVISIONS
1. Improvements in the Low-Income
Housing Credit -- increase per
capita credit by $0.10 per year
through 2004; thereafter COLA;
$2 million small State minimum
beginning in 2001; COLA begin-
ning in 2005; modify stacking
rules and credit allocation
rules; certain Native American
housing assistance disregarded
in determining whether building
is Federally subsidized for
purposes of the low-income
housing credit
[tyba 12/31/00] --- -4 -24 -68
2. Accelerate 5-year phasein of
private activity bond
volume cap
[cyba 12/31/00] --- -10 -41 -83
3. Exclusion from gross income
for certain forgiven mortgage
obligations
[doia 12/31/00] --- -2 -6 -6
TOTAL OF REAL ESTATE PROVISIONS --- -16 -71 -157
_____________________________________________________________________
NET TOTAL -463 -2,353 -9,201 -10,625
_____________________________________________________________________
[table continued]
_____________________________________________________________________
Provision
[Effective] 2004 2005 2006 2007
____________________________________________________________________
SMALL BUSINESS PROVISIONS
1. Accelerate 100% self-employed
health insurance deduction and
extend eligibility to those
who choose not to participate
in employer-subsidized health
plans
[tyba 12/31/00] --- --- --- ---
2. Increase section 179 expensing
to $30,000
[tyba 12/31/00] -187 -176 -160 -167
3. Increase business meals
deduction (excluding enter-
tainment expenses) to 55% in
2001 and 60% in 2002 and
thereafter
[tyba 12/31/00] -1,137 -1,186 -1,239 -1,294
4. 80% business meals deduction
for workers subject to DOT
hours of service limitation
[tyba 12/31/00] -55 -47 -37 -26
5. Coordinate farmer income
averaging and the AMT and
provide the same income
averaging relief to
commercial fishermen
[tyba 12/31/00] -2 -3 -3 -4
6. Repeal the occupational
taxes relating to distilled
spirits, wine, and beer
[7/1/01] -75 -75 -75 -75
7. Permit installment method for
accrual basis taxpayers
[iso/a 12/17/99] -70 -8 -20 -34
TOTAL OF SMALL BUSINESS
PROVISIONS -1,526 -1,495 -1,534 -1,600
PENSION PROVISIONS
A. Provisions for Expanding
Coverage
1. Increase contribution and
benefit limits:
a. Increase limitation on
exclusion for elective
deferrals to $11,000 in 2001,
$12,000 in 2002, $13,000 in
2003, $14,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] -578 -640 -687 -735
b. Increase limitation on
SIMPLE elective contribu-
tions to $7,000 in 2001,
$8,000 in 2002, $9,000 in
2003, $10,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] -27 -29 -29 -30
c. Increase defined benefit
dollar limit to $160,000
[yba 12/31/00] -45 -48 -50 -53
d. Lower early retirement age
to 62; lower normal retire-
ment age to 65
[yba 12/31/00] -4 -5 -5 -5
e. Increase annual addition
limitation for defined
contribution plans to
$40,000 1
[yba 12/31/00] -15 -16 -17 -19
f. Increase qualified plan
compensation limit to
$200,000 1
[yba 12/31/00] -91 -99 -107 -115
g. Increase limits on defer-
rals under deferred compen-
sation plans of State and
local governments and tax-
exempt organizations to
$11,000 in 2001, $12,000 in
2002, $13,000 in 2003, and
$14,000 in 2004 1
[yba 12/31/00] -119 -128 -136 -145
2. Plan loans for subchapter S
owners, partners, and
sole proprietors
[lma 12/31/00] -35 -37 -39 -42
3. Modification of top-heavy
rules
[yba 12/31/00] -12 -14 -16 -17
4. Elective deferrals not taken
into account for purposes of
deduction limits
[yba 12/31/00] -94 -101 -108 -115
5. Repeal of coordination re-
quirements for deferred
compensation plans of State
and local governments
and tax-exempt organizations
[yba 12/31/00] -22 -22 -23 -24
6. Elimination of user fee for
certain requests regarding
small employer pension plans;
waiver applies only for
request made during first
5 plan years 2
[rma 12/31/00] --- --- --- ---
7. Definition of compensation
for purposes of deduction
limits 1
[yba 12/31/00] -3 -3 -3 -3
8. Option to treat elective
deferrals as after-tax con-
tributions
[tyba 12/31/00] 144 89 -2 -104
Subtotal of Provisions for
Expanding Coverage -901 -1,053 -1,222 -1,407
B. Provisions for Enhancing
Fairness for Women
1. Additional catch-up contribu-
tions for individuals age 50
and above -- increase in maxi-
mum contribution limits for
pension plans by 10% annually
beginning in 2001, not to
exceed 40%
[yba 12/31/00] -99 -95 -97 -100
2. Equitable treatment for
contributions of employees to
defined contribution plans 1
[yba 12/31/00] -91 -97 -104 -111
3. Simplify and update the
minimum distribution rules by
modifying post-death distribu-
tion rules, reducing (to 10%)
the excise tax on failures to
make minimum distributions, and
directing the Treasury to sim-
plify and finalize regulations
relating to the minimum
distribution rules
[yba 12/31/00] -268 -297 -330 -366
4. Clarification of tax treatment
of division of section 457
plan benefits upon divorce
[tdapma 12/31/00] Negligible Revenue Effect
5. Modification of safe harbor
relief for hardship
withdrawals from 401(k) plans
[yba 12/31/00] Negligible Revenue Effect
6. Faster vesting of certain
employer matching contributions
[pyba 12/31/00] Negligible Revenue Effect
Subtotal of Provisions for
Enhancing Fairness for Women -458 -489 -531 -577
C. Provisions for Increasing
Portability for Participants
1. Rollovers allowed among govern-
mental section 457 plans,
section 403(b) plans, and
qualified plans
[dma 12/31/00] -5 -5 -5 -5
2. Rollovers of IRAs to workplace
retirement plans
[dma 12/31/00] Negligible Revenue Effect
3. Rollovers of after-tax
retirement plan contributions
[dma 12/31/00] Negligible Revenue Effect
4. Waiver of 60-day rule
[dma 12/31/00] Negligible Revenue Effect
5. Treatment of forms of
qualified plan distributions
[yba 12/31/00] Negligible Revenue Effect
6. Rationalization of
restrictions on distributions
[da 12/31/00] Negligible Revenue Effect
7. Purchase of service credit in
governmental defined benefit
plans
[ta 12/31/00] Negligible Revenue Effect
8. Employers may disregard
rollovers for cash-out amounts
[da 12/31/00] Negligible Revenue Effect
9. Minimum distribution and
inclusion requirements for
section 457 plans Considered in Other Provisions
[da 12/31/00]
Subtotal of Provisions for
Increasing Portability for
Participants -5 -5 -5 -5
D. Provisions for Strengthening
Pension Security and Enforcement
1. Phase-in repeal of 150% of
current liability funding
limit; extend maximum
deduction rule
[yba 12/31/00] -36 -36 -38 -38
2. Excise tax relief for sound
pension funding
[yba 12/31/00] -3 -3 -3 -3
3. Notice of significant
reduction in plan benefit
accruals
[pateo/a DOE] Negligible Revenue Effect
4. Repeal 100% of compensation
limit for multiemployer plans
[yba 12/31/00] -4 -4 -4 -5
Subtotal of Provisions for
Strengthening Pension Security
and Enforcement -43 -43 -45 -46
E. Provisions for Reducing
Regulatory Burdens
1. Modification of timing of
plan valuations
[pyba 12/31/00] Negligible Revenue Effect
2. ESOP dividends may be reinves-
ted without loss of dividend
deduction
[tyba 12/31/00] -61 -63 -66 -69
3. Repeal transition rule
relating to certain highly
compensated employees
[pyba 12/31/00] -3 -3 -3 -4
4. Employees of tax-exempt
entities 3
[DOE] Negligible Revenue Effect
5. Treatment of employer-provided
retirement advice
[yba 12/31/00] Negligible Revenue Effect
6. Pension plan reporting
simplification 3
[1/1/01] Negligible Revenue Effect
7. Improvement to Employee Plans
Compliance Resolution System 3
[DOE] Negligible Revenue Effect
8. Clarification of exclusion for
employer-provided transit passes
[tyba 12/31/00] -14 -15 -15 -16
9. Repeal of multiple use test
[yba 12/31/00] Considered in Other Provisions
10. Flexibility in nondiscrimination
and line of business rules 3
[DOE] Negligible Revenue Effect
11. Extension to international
organization of moratorium on
application of certain non-
discrimination rules applicable
to State and local
government plans
[yba 12/31/00] Negligible Revenue Effect
12. Notice and consent period
regarding distributions
[yba 12/31/00] No Revenue Effect
Subtotal of Provisions for
Reducing Regulatory Burdens -78 -81 -84 -89
F. Provisions Relating to Plan
Amendments
[DOE]
TOTAL OF PENSION PROVISIONS -1,485 -1,671 -1,887 -2,124
ESTATE AND GIFT TAX RELIEF
PROVISIONS
1. Reduction in estate, gift,
and generation-skipping transfer
taxes: beginning in 2001, convert
the unified credit into a true
exemption, repeal the 5% "bubble"
(which phases out the lower
rates); repeal rates in excess
of 53%; in 2002, repeal rates in
excess of 50%; in 2003 through
2004, reduce all rates by 1
percentage point a year; propor-
tionately reduce State tax
credit rates
[dda & gma 12/31/00] -7,247 -8,465 -9,134 -9,674
2. Provide deemed allocation of
GST exemption
[ta 12/31/99] -4 -4 -4 -4
3. Provide retroactive allocation
of GST for unnatural orders
of death
[generally ea 12/31/99] -6 -6 -6 -6
4. Allow severances of trusts
holding property having an
inclusion ratio of greater
than zero Included in Estate and
[---] Gift Item 3.
5. Modify certain valuation rates Included in Estate and
[---] Gift Item 3.
6. Provide relief from late
elections Included in Estate and
[---] Gift Item 3.
7. Provide rule of substantial
compliance Included in Estate and
[---] Gift Item 3.
8. Expand estate tax rule for
conservation easements -- in-
crease the 25-mile limit to 50
miles; increase 10-mile limit
to 25 miles, and clarify that
that the date for determining
easement compliance
[dda 12/31/99 & dda 12/31/97] -22 -23 -24 -25
TOTAL OF ESTATE AND GIFT TAX
RELIEF PROVISIONS -7,279 -8,498 -9,168 -9,709
DISTRESSED COMMUNITIES AND
INDUSTRIES PROVISIONS
1. "American Community Renewal
Act of 1999" -- designate 15
renewal communities within 36
months; provide various incen-
tives (zero capital gains tax
on certain 5-year investments;
special deduction for real
estate revitalization expendi-
tures; special expensing for
certain business property; work
opportunity tax credit; environ-
mental remediation expenses;
family development accounts)
beginning 1/1/01 and ending
12/31/07
[DOE] -201 -220 -247 -325
2. Increase maximum reforestation
expenses qualifying for amorti-
zation and credit from $10,000
to $25,000; remove cap on amor-
tization of reforestation costs
in 2001 through 2003
[tyba 12/31/00] -27 -29 -32 -34
TOTAL OF DISTRESSED COMMUNITIES
AND INDUSTRIES PROVISIONS -228 -249 -279 -359
REAL ESTATE PROVISIONS
1. Improvements in the Low-Income
Housing Credit -- increase per
capita credit by $0.10 per year
through 2004; thereafter COLA;
$2 million small State minimum
beginning in 2001; COLA begin-
ning in 2005; modify stacking
rules and credit allocation
rules; certain Native American
housing assistance disregarded
in determining whether building
is Federally subsidized for
purposes of the low-income
housing credit
[tyba 12/31/00] -140 -234 -345 -467
2. Accelerate 5-year phasein of
private activity bond
volume cap
[cyba 12/31/00] -127 -163 -179 -179
3. Exclusion from gross income
for certain forgiven mortgage
obligations
[doia 12/31/00] -6 -7 -7 -7
TOTAL OF REAL ESTATE PROVISIONS -273 -404 -531 -653
_____________________________________________________________________
NET TOTAL -10,791 -12,317 -13,399 -14,445
_____________________________________________________________________
[table continued]
__________________________________________________________________
Provision
[Effective] 2008 2009 2010
__________________________________________________________________
SMALL BUSINESS PROVISIONS
1. Accelerate 100% self-employed
health insurance deduction and
extend eligibility to those
who choose not to participate
in employer-subsidized health
plans
[tyba 12/31/00] --- --- ---
2. Increase section 179 expensing
to $30,000
[tyba 12/31/00] -188 -197 -202
3. Increase business meals
deduction (excluding enter-
tainment expenses) to 55% in
2001 and 60% in 2002 and
thereafter
[tyba 12/31/00] -1,351 -1,412 -1,477
4. 80% business meals deduction
for workers subject to DOT
hours of service limitation
[tyba 12/31/00] -13 --- ---
5. Coordinate farmer income
averaging and the AMT and
provide the same income
averaging relief to
commercial fishermen
[tyba 12/31/00] -5 -6 -7
6. Repeal the occupational
taxes relating to distilled
spirits, wine, and beer
[7/1/01] -75 -75 -75
7. Permit installment method for
accrual basis taxpayers
[iso/a 12/17/99] -47 -60 -76
TOTAL OF SMALL BUSINESS
PROVISIONS -1,679 -1,750 -1,837
PENSION PROVISIONS
A. Provisions for Expanding
Coverage
1. Increase contribution and
benefit limits:
a. Increase limitation on
exclusion for elective
deferrals to $11,000 in 2001,
$12,000 in 2002, $13,000 in
2003, $14,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] -783 -832 -879
b. Increase limitation on
SIMPLE elective contribu-
tions to $7,000 in 2001,
$8,000 in 2002, $9,000 in
2003, $10,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] -32 -33 -35
c. Increase defined benefit
dollar limit to $160,000
[yba 12/31/00] -55 -57 -59
d. Lower early retirement age
to 62; lower normal retire-
ment age to 65
[yba 12/31/00] -5 -5 -5
e. Increase annual addition
limitation for defined
contribution plans to
$40,000 1
[yba 12/31/00] -20 -21 -23
f. Increase qualified plan
compensation limit to
$200,000 1
[yba 12/31/00] -122 -131 -139
g. Increase limits on defer-
rals under deferred compen-
sation plans of State and
local governments and tax-
exempt organizations to
$11,000 in 2001, $12,000 in
2002, $13,000 in 2003, and
$14,000 in 2004 1
[yba 12/31/00] - 153 -162 -170
2. Plan loans for subchapter S
owners, partners, and
sole proprietors
[lma 12/31/00] -44 -47 -49
3. Modification of top-heavy
rules
[yba 12/31/00] -19 -21 -23
4. Elective deferrals not taken
into account for purposes of
deduction limits
[yba 12/31/00] -122 -129 -135
5. Repeal of coordination re-
quirements for deferred
compensation plans of State
and local governments
and tax-exempt organizations
[yba 12/31/00] -25 -26 -27
6. Elimination of user fee for
certain requests regarding
small employer pension plans;
waiver applies only for
request made during first
5 plan years 2
[rma 12/31/00] --- --- ---
7. Definition of compensation
for purposes of deduction
limits 1
[yba 12/31/00] -3 -3 -3
8. Option to treat elective
deferrals as after-tax con-
tributions
[tyba 12/31/00] -218 -345 -485
Subtotal of Provisions for
Expanding Coverage -1,601 -1,812 -2,032
B. Provisions for Enhancing
Fairness for Women
1. Additional catch-up contribu-
tions for individuals age 50
and above -- increase in maxi-
mum contribution limits for
pension plans by 10% annually
beginning in 2001, not to
exceed 40%
[yba 12/31/00] -101 -103 -103
2. Equitable treatment for
contributions of employees to
defined contribution plans 1
[yba 12/31/00] -118 -124 -131
3. Simplify and update the
minimum distribution rules by
modifying post-death distribu-
tion rules, reducing (to 10%)
the excise tax on failures to
make minimum distributions, and
directing the Treasury to sim-
plify and finalize regulations
relating to the minimum
distribution rules
[yba 12/31/00] -402 -441 -484
4. Clarification of tax treatment
of division of section 457
plan benefits upon divorce
[tdapma 12/31/00] Negligible Revenue Effect
5. Modification of safe harbor
relief for hardship
withdrawals from 401(k) plans
[yba 12/31/00] Negligible Revenue Effect
6. Faster vesting of certain
employer matching contributions
[pyba 12/31/00] Negligible Revenue Effect
Subtotal of Provisions for
Enhancing Fairness for Women -621 -668 -718
C. Provisions for Increasing
Portability for Participants
1. Rollovers allowed among govern-
mental section 457 plans,
section 403(b) plans, and
qualified plans
[dma 12/31/00] -6 -6 -6
2. Rollovers of IRAs to workplace
retirement plans
[dma 12/31/00] Negligible Revenue Effect
3. Rollovers of after-tax
retirement plan contributions
[dma 12/31/00] Negligible Revenue Effect
4. Waiver of 60-day rule
[dma 12/31/00] Negligible Revenue Effect
5. Treatment of forms of
qualified plan distributions
[yba 12/31/00] Negligible Revenue Effect
6. Rationalization of
restrictions on distributions
[da 12/31/00] Negligible Revenue Effect
7. Purchase of service credit in
governmental defined benefit
plans
[ta 12/31/00] Negligible Revenue Effect
8. Employers may disregard
rollovers for cash-out amounts
[da 12/31/00] Negligible Revenue Effect
9. Minimum distribution and
inclusion requirements for
section 457 plans
[da 12/31/00] Considered in Other Provisions
Subtotal of Provisions for
Increasing Portability for
Participants -6 -6 -6
D. Provisions for Strengthening
Pension Security and Enforcement
1. Phase-in repeal of 150% of
current liability funding
limit; extend maximum
deduction rule
[yba 12/31/00] -39 -41 -42
2. Excise tax relief for sound
pension funding
[yba 12/31/00] -3 -3 -3
3. Notice of significant
reduction in plan benefit
accruals
[pateo/a DOE] Negligible Revenue Effect
4. Repeal 100% of compensation
limit for multiemployer plans
[yba 12/31/00] -5 -5 -5
Subtotal of Provisions for
Strengthening Pension Security
and Enforcement -47 -49 -50
E. Provisions for Reducing
Regulatory Burdens
1. Modification of timing of
plan valuations
[pyba 12/31/00] Negligible Revenue Effect
2. ESOP dividends may be reinves-
ted without loss of dividend
deduction
[tyba 12/31/00] -71 -74 -77
3. Repeal transition rule
relating to certain highly
compensated employees
[pyba 12/31/00] -4 -4 -4
4. Employees of tax-exempt
entities 3
[DOE] Negligible Revenue Effect
5. Treatment of employer-provided
retirement advice
[yba 12/31/00] Negligible Revenue Effect
6. Pension plan reporting
simplification 3
[1/1/01] Negligible Revenue Effect
7. Improvement to Employee Plans
Compliance Resolution System 3
[DOE] Negligible Revenue Effect
8. Clarification of exclusion for
employer-provided transit passes
[tyba 12/31/00] -16 -16 -16
9. Repeal of multiple use test
[yba 12/31/00] Considered in Other Provisions
10. Flexibility in nondiscrimination
and line of business rules 3
[DOE] Negligible Revenue Effect
11. Extension to international
organization of moratorium on
application of certain non-
discrimination rules applicable
to State and local
government plans
[yba 12/31/00] Negligible Revenue Effect
12. Notice and consent period
regarding distributions
[yba 12/31/00] No Revenue Effect
Subtotal of Provisions for
Reducing Regulatory Burdens -91 -94 -97
F. Provisions Relating to Plan
Amendments
[DOE]
TOTAL OF PENSION PROVISIONS -2,366 -2,629 -2,903
ESTATE AND GIFT TAX RELIEF
PROVISIONS
1. Reduction in estate, gift,
and generation-skipping transfer
taxes: beginning in 2001, convert
the unified credit into a true
exemption, repeal the 5% "bubble"
(which phases out the lower
rates); repeal rates in excess
of 53%; in 2002, repeal rates in
excess of 50%; in 2003 through
2004, reduce all rates by 1
percentage point a year; propor-
tionately reduce State tax
credit rates
[dda & gma 12/31/00] -10,173 -10,916 -11,635
2. Provide deemed allocation of
GST exemption
[ta 12/31/99] -4 -4 -4
3. Provide retroactive allocation
of GST for unnatural orders
of death
[generally ea 12/31/99] -6 -6 -6
4. Allow severances of trusts
holding property having an
inclusion ratio of greater
than zero Included in Estate and
[---] Gift Item 3.
5. Modify certain valuation rates Included in Estate and
[---] Gift Item 3.
6. Provide relief from late
elections Included in Estate and
[---] Gift Item 3.
7. Provide rule of substantial
compliance Included in Estate and
[---] Gift Item 3.
8. Expand estate tax rule for
conservation easements -- in-
crease the 25-mile limit to 50
miles; increase 10-mile limit
to 25 miles, and clarify that
that the date for determining
easement compliance
[dda 12/31/99 & dda 12/31/97] -26 -29 -31
TOTAL OF ESTATE AND GIFT TAX
RELIEF PROVISIONS -10,209 -10,955 -11,676
DISTRESSED COMMUNITIES AND
INDUSTRIES PROVISIONS
1. "American Community Renewal
Act of 1999" -- designate 15
renewal communities within 36
months; provide various incen-
tives (zero capital gains tax
on certain 5-year investments;
special deduction for real
estate revitalization expendi-
tures; special expensing for
certain business property; work
opportunity tax credit; environ-
mental remediation expenses;
family development accounts)
beginning 1/1/01 and ending
12/31/07
[DOE] -141 -35 -76
2. Increase maximum reforestation
expenses qualifying for amorti-
zation and credit from $10,000
to $25,000; remove cap on amor-
tization of reforestation costs
in 2001 through 2003
[tyba 12/31/00] -33 -29 -25
TOTAL OF DISTRESSED COMMUNITIES
AND INDUSTRIES PROVISIONS -174 -64 -101
REAL ESTATE PROVISIONS
1. Improvements in the Low-Income
Housing Credit -- increase per
capita credit by $0.10 per year
through 2004; thereafter COLA;
$2 million small State minimum
beginning in 2001; COLA begin-
ning in 2005; modify stacking
rules and credit allocation
rules; certain Native American
housing assistance disregarded
in determining whether building
is Federally subsidized for
purposes of the low-income
housing credit
[tyba 12/31/00] -601 -750 -913
2. Accelerate 5-year phasein of
private activity bond
volume cap
[cyba 12/31/00] -174 -167 -159
3. Exclusion from gross income
for certain forgiven mortgage
obligations
[doia 12/31/00] -7 -8 -8
TOTAL OF REAL ESTATE PROVISIONS -782 -925 -1,080
__________________________________________________________________
NET TOTAL -15,210 -16,323 -17,597
__________________________________________________________________
[table continued]
_______________________________________________________________
Provision
[Effective] 2000-05 2000-10
_______________________________________________________________
SMALL BUSINESS PROVISIONS
1. Accelerate 100% self-employed
health insurance deduction and
extend eligibility to those
who choose not to participate
in employer-subsidized health
plans
[tyba 12/31/00] -2,077 -2,077
2. Increase section 179 expensing
to $30,000
[tyba 12/31/00] -1,688 -2,605
3. Increase business meals
deduction (excluding enter-
tainment expenses) to 55% in
2001 and 60% in 2002 and
thereafter
[tyba 12/31/00] -4,466 -11,239
4. 80% business meals deduction
for workers subject to DOT
hours of service limitation
[tyba 12/31/00] -276 -351
5. Coordinate farmer income
averaging and the AMT and
provide the same income
averaging relief to
commercial fishermen
[tyba 12/31/00] -9 -33
6. Repeal the occupational
taxes relating to distilled
spirits, wine, and beer
[7/1/01] -364 -739
7. Permit installment method for
accrual basis taxpayers
[iso/a 12/17/99] -1,841 -2,078
TOTAL OF SMALL BUSINESS
PROVISIONS -10, 721 -19,122
PENSION PROVISIONS
A. Provisions for Expanding
Coverage
1. Increase contribution and
benefit limits:
a. Increase limitation on
exclusion for elective
deferrals to $11,000 in 2001,
$12,000 in 2002, $13,000 in
2003, $14,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] -2,135 -6,052
b. Increase limitation on
SIMPLE elective contribu-
tions to $7,000 in 2001,
$8,000 in 2002, $9,000 in
2003, $10,000 in 2004; index
in $500 increments thereafter
1
[yba 12/31/00] -96 -255
c. Increase defined benefit
dollar limit to $160,000
[yba 12/31/00] -182 -454
d. Lower early retirement age
to 62; lower normal retire-
ment age to 65
[yba 12/31/00] -21 -45
e. Increase annual addition
limitation for defined
contribution plans to
$40,000 1
[yba 12/31/00] -63 -163
f. Increase qualified plan
compensation limit to
$200,000 1
[yba 12/31/00] -391 -1,004
g. Increase limits on defer-
rals under deferred compen-
sation plans of State and
local governments and tax-
exempt organizations to
$11,000 in 2001, $12,000 in
2002, $13,000 in 2003, and
$14,000 in 2004 1
[yba 12/31/00] -500 -1,266
2. Plan loans for subchapter S
owners, partners, and
sole proprietors
[lma 12/31/00] -153 -374
3. Modification of top-heavy
rules
[yba 12/31/00] -50 -146
4. Elective deferrals not taken
into account for purposes of
deduction limits
[yba 12/31/00] -396 -1,004
5. Repeal of coordination re-
quirements for deferred
compensation plans of State
and local governments
and tax-exempt organizations
[yba 12/31/00] -104 -228
6. Elimination of user fee for
certain requests regarding
small employer pension plans;
waiver applies only for
request made during first
5 plan years 2
[rma 12/31/00] -19 -19
7. Definition of compensation
for purposes of deduction
limits 1
[yba 12/31/00] -12 -28
8. Option to treat elective
deferrals as after-tax con-
tributions
[tyba 12/31/00] 514 -640
Subtotal of Provisions for
Expanding Coverage -3,608 -11,678
B. Provisions for Enhancing
Fairness for Women
1. Additional catch-up contribu-
tions for individuals age 50
and above -- increase in maxi-
mum contribution limits for
pension plans by 10% annually
beginning in 2001, not to
exceed 40%
[yba 12/31/00] -550 -1,054
2. Equitable treatment for
contributions of employees to
defined contribution plans 1
[yba 12/31/00] -401 -989
3. Simplify and update the
minimum distribution rules by
modifying post-death distribu-
tion rules, reducing (to 10%)
the excise tax on failures to
make minimum distributions, and
directing the Treasury to sim-
plify and finalize regulations
relating to the minimum
distribution rules
[yba 12/31/00] -1,135 -3,157
4. Clarification of tax treatment
of division of section 457
plan benefits upon divorce
[tdapma 12/31/00] Negligible Revenue Effect
5. Modification of safe harbor
relief for hardship
withdrawals from 401(k) plans
[yba 12/31/00] Negligible Revenue Effect
6. Faster vesting of certain
employer matching contributions
[pyba 12/31/00] Negligible Revenue Effect
Subtotal of Provisions for
Enhancing Fairness for Women -2,086 -5,200
C. Provisions for Increasing
Portability for Participants
1. Rollovers allowed among govern-
mental section 457 plans,
section 403(b) plans, and
qualified plans
[dma 12/31/00] 6 -22
2. Rollovers of IRAs to workplace
retirement plans
[dma 12/31/00] Negligible Revenue Effect
3. Rollovers of after-tax
retirement plan contributions
[dma 12/31/00] Negligible Revenue Effect
4. Waiver of 60-day rule
[dma 12/31/00] Negligible Revenue Effect
5. Treatment of forms of
qualified plan distributions
[yba 12/31/00] Negligible Revenue Effect
6. Rationalization of
restrictions on distributions
[da 12/31/00] Negligible Revenue Effect
7. Purchase of service credit in
governmental defined benefit
plans
[ta 12/31/00] Negligible Revenue Effect
8. Employers may disregard
rollovers for cash-out amounts
[da 12/31/00] Negligible Revenue Effect
9. Minimum distribution and
inclusion requirements for
section 457 plans
[da 12/31/00] Considered in Other Provisions
Subtotal of Provisions for
Increasing Portability for
Participants 6 -22
D. Provisions for Strengthening
Pension Security and Enforcement
1. Phase-in repeal of 150% of
current liability funding
limit; extend maximum
deduction rule
[yba 12/31/00] -109 -307
2. Excise tax relief for sound
pension funding
[yba 12/31/00] -14 -29
3. Notice of significant
reduction in plan benefit
accruals
[pateo/a DOE]
4. Repeal 100% of compensation
limit for multiemployer plans
[yba 12/31/00] -19 -42
Subtotal of Provisions for
Strengthening Pension Security
and Enforcement -142 -378
E. Provisions for Reducing
Regulatory Burdens
1. Modification of timing of
plan valuations
[pyba 12/31/00] Negligible Revenue Effect
2. ESOP dividends may be reinves-
ted without loss of dividend
deduction
[tyba 12/31/00] -243 -600
3. Repeal transition rule
relating to certain highly
compensated employees
[pyba 12/31/00] -13 -32
4. Employees of tax-exempt
entities 3
[DOE] Negligible Revenue Effect
5. Treatment of employer-provided
retirement advice
[yba 12/31/00] Negligible Revenue Effect
6. Pension plan reporting
simplification 3
[1/1/01] Negligible Revenue Effect
7. Improvement to Employee Plans
Compliance Resolution System 3
[DOE]
8. Clarification of exclusion for
employer-provided transit passes
[tyba 12/31/00] -58 -137
9. Repeal of multiple use test
[yba 12/31/00] Considered in Other Provisions
10. Flexibility in nondiscrimination
and line of business rules 3
[DOE] Negligible Revenue Effect
11. Extension to international
organization of moratorium on
application of certain non-
discrimination rules applicable
to State and local
government plans
[yba 12/31/00] Negligible Revenue Effect
12. Notice and consent period
regarding distributions
[yba 12/31/00] No Revenue Effect
Subtotal of Provisions for
Reducing Regulatory Burdens 314 769
F. Provisions Relating to Plan
Amendments
[DOE] No Revenue Effect
TOTAL OF PENSION PROVISIONS -6,144 -18,047
ESTATE AND GIFT TAX RELIEF
PROVISIONS
1. Reduction in estate, gift,
and generation-skipping transfer
taxes: beginning in 2001, convert
the unified credit into a true
exemption, repeal the 5% "bubble"
(which phases out the lower
rates); repeal rates in excess
of 53%; in 2002, repeal rates in
excess of 50%; in 2003 through
2004, reduce all rates by 1
percentage point a year; propor-
tionately reduce State tax
credit rates
[dda & gma 12/31/00] -26,808 -78,340
2. Provide deemed allocation of
GST exemption
[ta 12/31/99] -16 -36
3. Provide retroactive allocation
of GST for unnatural orders
of death
[generally ea 12/31/99] -27 -57
4. Allow severances of trusts
holding property having an
inclusion ratio of greater
than zero Included in Estate and
[---] Gift Item 3.
5. Modify certain valuation rates Included in Estate and
[---] Gift Item 3.
6. Provide relief from late
elections Included in Estate and
[---] Gift Item 3.
7. Provide rule of substantial
compliance Included in Estate and
[---] Gift Item 3.
8. Expand estate tax rule for
conservation easements -- in-
crease the 25-mile limit to 50
miles; increase 10-mile limit
to 25 miles, and clarify that
that the date for determining
easement compliance
[dda 12/31/99 & dda 12/31/97] -92 -227
TOTAL OF ESTATE AND GIFT TAX
RELIEF PROVISIONS -26,943 -78,660
DISTRESSED COMMUNITIES AND
INDUSTRIES PROVISIONS
1. "American Community Renewal
Act of 1999" -- designate 15
renewal communities within 36
months; provide various incen-
tives (zero capital gains tax
on certain 5-year investments;
special deduction for real
estate revitalization expendi-
tures; special expensing for
certain business property; work
opportunity tax credit; environ-
mental remediation expenses;
family development accounts)
beginning 1/1/01 and ending
12/31/07
[DOE] -922 -1,745
2. Increase maximum reforestation
expenses qualifying for amorti-
zation and credit from $10,000
to $25,000; remove cap on amor-
tization of reforestation costs
in 2001 through 2003
[tyba 12/31/00] -98 -250
TOTAL OF DISTRESSED COMMUNITIES
AND INDUSTRIES PROVISIONS -1,020 -1,995
REAL ESTATE PROVISIONS
1. Improvements in the Low-Income
Housing Credit -- increase per
capita credit by $0.10 per year
through 2004; thereafter COLA;
$2 million small State minimum
beginning in 2001; COLA begin-
ning in 2005; modify stacking
rules and credit allocation
rules; certain Native American
housing assistance disregarded
in determining whether building
is Federally subsidized for
purposes of the low-income
housing credit
[tyba 12/31/00] -470 -3,545
2. Accelerate 5-year phasein of
private activity bond
volume cap
[cyba 12/31/00] -425 -1,284
3. Exclusion from gross income
for certain forgiven mortgage
obligations
[doia 12/31/00] -27 -64
TOTAL OF REAL ESTATE PROVISIONS -922 -4,893
_______________________________________________________________
NET TOTAL -45,750 -122,717
_______________________________________________________________
Joint Committee on Taxation
NOTE: Details may not add to totals due to rounding.
Legend for "Effective" column:
cyba = calendar years beginning after
da = distributions after
doia = discharges of indebtedness after
dda = decedents dying after
dma = distributions made after
DOE = date of enactment
ea = events after
gma = gifts made after
iso/a = installment sales on or after
lma = loans made after
pateo/a = plan amendments taking effect on or after
pyba = plan years beginning after
rma = requests made after
ta = transfers after
tdapma = transfers, distributions, and payments made after
tyba = taxable years beginning after
yba = years beginning after
FOOTNOTES
1 Provision includes interaction with other provisions in
Provisions for Expanding Coverage.
2 Estimate provided by the Congressional Budget Office.
3 Directs the Secretary of the Treasury to modify rules through
regulations.
END OF FOOTNOTES
DOCUMENT ATTRIBUTES
- Institutional AuthorsJoint Committee on TaxationHouse of RepresentativesSenate
- Code Sections
- Subject Area/Tax Topics
- Index Termslegislation, taxhealth care and insurance, self-employed personsdepreciation, expensing electionbusiness expense deduction, limits, meals and entertainmentestate taxlow-income housing, creditpension plans, cash or deferred arrangementsinstallment method
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2000-7406 (5 original pages)
- Tax Analysts Electronic Citation2000 TNT 49-75
