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JCT Revises Comparison of Revenue Estimates for H.R. 2990

MAR. 14, 2000

JCX-19-00 R

DATED MAR. 14, 2000
DOCUMENT ATTRIBUTES
Citations: JCX-19-00 R

 

=============== SUMMARY ===============

 

The Joint Committee on Taxation has revised (JCX-19-00 R) its side-by-side comparison of estimated revenue effects of H.R. 2990 as passed by the House and Senate.

The total over ten years comes to $68.5 billion for the House bill and $39.3 billion for the Senate version. Only the House bill contains a $47.4 billion provision to provide an above-the-line deduction for health insurance, phased-in to 100 percent by 2007.

The Senate version includes an increase to $1 million in the income limit for Roth IRA conversions that would cost $10 billion over ten years. Only the Senate provides revenue offset provisions, which total $5.6 billion.

 

=============== FULL TEXT ===============

 

                     JOINT COMMITTEE ON TAXATION

 

                           March 14, 2000

 

                             JCX-19-00 R

 

 

      COMPARISON OF THE ESTIMATED REVENUE EFFECTS OF H.R. 2990

 

                AS PASSED BY THE HOUSE AND THE SENATE

 

 

                      Fiscal Years 2000 - 2010

 

 

                        [Millions of Dollars]

 

_____________________________________________________________________

 

                                                House Bill

 

                                      _______________________________

 

[Effective]                           2000     2001     2002     2003

 

_____________________________________________________________________

 

 

I. HEALTH-RELATED REVENUE

 

   PROVISIONS

 

 

A. Provide an above-the-line

 

   deduction for health insurance

 

   for which the taxpayer pays at

 

   least 50% of the premium,

 

   phased in as follows:  25% in

 

   2002 through 2004, 35% in 2005,

 

   65% in 2006, and 100%

 

   thereafter

 

   [tyba 12/31/01]                     ---      ---     -491   -1,667

 

 

B. {H} Accelerate 100%

 

   self-employed health insurance

 

   deduction; extend eligibility

 

   for self-employed health

 

   insurance deduction to those

 

   who choose not to participate

 

   in employer-subsidized health

 

   plans; {S} 100% deduction of

 

   health insurance for

 

   self-employed

 

   [H = tyba 12/31/00

 

   S = tyba 12/31/99]                  ---     -287   -1,093     -697

 

 

C. Expansion of Availability of

 

   Medical Savings Accounts

 

 

   1. Full availability of MSAs

 

      and lower minimum deductible

 

      {H} permit both employer

 

      and employee contributions;

 

      allow MSAs to be offered in

 

      cafeteria plans; {S} modify

 

      additional tax on distribu-

 

      tions not used for medical

 

      expenses

 

      [H = tyba 12/31/00

 

      S = tyba 12/31/99]               ---     -109     -326     -370

 

 

   2. Federal employee partici-

 

      pation in MSAs

 

      [pybo/a 1/1/00]                           No provision

 

 

D. Provisions Relating to Long-

 

   Term Care

 

 

   1. {H} Provide an above-the-

 

      line deduction for long-

 

      term care insurance for which

 

      the taxpayer pays at least

 

      50% of the premium, phased

 

      in as follows: 25% in 2002

 

      through 2004, 35% in 2005, 65%

 

      in 2006, and 100% thereafter;

 

      {S} Above-the-line deduction

 

      for 100% of premiums for long-

 

      term care insurance for

 

      individuals not participating

 

      [in employer-subsidized plan

 

      [H = tyba 12/31/01

 

      S = tyba 12/31/99]               ---      ---      -49     -333

 

 

   2. {H} Allow long-term care

 

      insurance to be offered as

 

      part of cafeteria plans,

 

      limited to amount of deduc-

 

      tible premiums; allow long-

 

      term care services to be

 

      reimbursed under a flexible

 

      spending arrangement /2/;

 

      {S} Allow long-term care

 

      insurance to be offered as

 

      part of cafeteria plans 2

 

      [H = tyba 12/31/01

 

      S = tyba 12/31/99]               ---      ---     -106     -149

 

 

   3. Provide an additional

 

      personal exemption to

 

      caretakers of elderly

 

      family members

 

      [tyba 12/31/00]                  --      -176     -275     -280

 

 

   4. Study of long-term care

 

      needs in the 21st century

 

      [DOE]                                     No Provision

 

 

E. Increase the Time Period for

 

   Measuring Eligible Expenses

 

   Qualifying for the Orphan

 

   Drug Tax Credit

 

   [epoia 12/31/00]                      ---     -6       -9      -10

 

 

F. {H} Add certain vaccines

 

   against Streptococcus

 

   Pneumoniae to the list of

 

   taxable vaccines in the Federal

 

   vaccine insurance program /3/;

 

   study of Federal vaccine

 

   insurance program /3/; reduce

 

   excise tax on all taxable

 

   vaccines to $0.50 per dose

 

   beginning in 2005 /4/; {S} Add

 

   certain vaccines against

 

   Streptococcus Pneumoniae to the

 

   list of taxable vaccines in the

 

   Federal vaccine insurance

 

   program

 

   [tyba 12/31/04]                     ---      ---      ---      ---

 

 

G. Credit for Clinical Testing

 

   Research Expenses Attributable

 

   to Certain Qualified Academic

 

   Institutions Including Teaching

 

   Hospitals

 

   [tyba 12/31/00]                     ---      5       -1       -1

 

 

H. Application of Patients' Bill

 

   of Rights to Group Health

 

   Plans -- require that health

 

   plans comply with patients'

 

   bill of rights provisions 6

 

   [1/1/01]                               Negligible Revenue Effect

 

 

I. Right to Information About

 

   Plans 6

 

   [DOE + 1 year]                              No Provision

 

 

J. Women's Health and Cancer

 

   Rights -- require that health

 

   plans provide coverage for

 

   minimum hospital stays for

 

   certain breast cancer treatments

 

   6 /7/

 

   [DOE]                                       No Provision

 

 

K. Genetic Information and Services

 

   -- prohibit discrimination on the

 

   basis of predictive genetic

 

   information 6

 

   [pyba DOE + 1 year ]                        No Provision

 

 

L. Carryover of Unused Health and

 

   Dependent Care Benefits from

 

   Cafeteria Plans and Flexible

 

   Spending Arrangements

 

   [tyba 12/31/99]                             No Provision

 

 

   TOTAL OF HEALTH-RELATED REVENUE

 

   PROVISIONS                            ---   -578   -2,350   -3,507

 

 

II. INDIVIDUAL RETIREMENT ARRANGE-

 

    MENTS INCREASE THE income limit

 

    FOR CONVERSION OF AN IRA TO A

 

    ROTH IRA TO $1 MILLION

 

    [tyba 12/31/99]                            No Provision

 

 

III. REVENUE OFFSET PROVISIONS

 

 

A. Modify Foreign Tax Credit

 

   Carryback

 

   [tyba 12/31/01]                             No Provision

 

 

B. Limit Use of Non-Accrual

 

   Experience Method of Accounting

 

   [tyea DOE]                                  No Provision

 

 

C. Information Reporting on

 

   Cancellation of Indebtedness

 

   by Non-Bank Financial

 

   Institutions

 

   [---]                                       No Provision

 

 

D. Extend IRS User Fees Through

 

   [9/30/09 /8/]

 

   [9/30/03]                                   No Provision

 

 

E. Property Subject to a Liability

 

   Under Section 357

 

   [---]                                       No Provision

 

 

F. Deny Deduction and Impose

 

   Excise Tax With Respect to

 

   Charitable Split-Dollar Life

 

   Insurance Arrangements

 

   [---]                                       No Provision

 

 

G. Allow Employers to Transfer

 

   Excess Defined Benefit

 

   Plan Assets to a Special Account

 

   for Health Benefits of Retirees

 

   (through 9/30/09) 9

 

   [tmi tyba 12/31/00]                         No Provision

 

 

H. Impose Limitation on Prefunding

 

   of Certain Employee Benefits

 

   [cpa DOE]                                   No provision

 

 

I. Repeal Installment Method for

 

   Accrual Taxpayers and Modify

 

   Pledge Rules

 

   [---]                                       No Provision

 

 

   TOTAL OF REVENUE OFFSET

 

   PROVISIONS                                  No Provision

 

_____________________________________________________________________

 

NET TOTAL                              ---     -578   -2,350   -3,507

 

_____________________________________________________________________

 

 

                          [table continued]

 

_____________________________________________________________________

 

                                                House Bill

 

                                      _______________________________

 

                                                        2000     2000

 

[Effective]                           2004     2005      -05      -10

 

_____________________________________________________________________

 

I. HEALTH-RELATED REVENUE

 

   PROVISIONS

 

 

A. Provide an above-the-line

 

   deduction for health insurance

 

   for which the taxpayer pays at

 

   least 50% of the premium,

 

   phased in as follows:  25% in

 

   2002 through 2004, 35% in 2005,

 

   65% in 2006, and 100%

 

   thereafter

 

   [tyba 12/31/01]                  -1,773   -2,122   -6,053  -47,444

 

 

B. {H} Accelerate 100% self-

 

   employed health insurance

 

   deduction; extend eligibility

 

   for self-employed health

 

   insurance deduction to those

 

   who choose not to participate

 

   in employer-subsidized health

 

   plans; {S} 100% deduction of

 

   health insurance for self-

 

   employed

 

   [H = tyba 12/31/00

 

   S = tyba 12/31/99]                  1      1   -2,077   -2,077

 

 

C. Expansion of Availability of

 

   Medical Savings Accounts

 

 

   1. Full availability of MSAs

 

      and lower minimum deductible

 

      {H} permit both employer

 

      and employee contributions;

 

      allow MSAs to be offered in

 

      cafeteria plans; {S} modify

 

      additional tax on distribu-

 

      tions not used for medical

 

      expenses

 

      [H = tyba 12/31/00

 

      S = tyba 12/31/99]              -414     -458   -1,677   -4,630

 

 

   2. Federal employee partici-

 

      pation in MSAs

 

      [pybo/a 1/1/00]                         No provision

 

 

D. Provisions Relating to Long-

 

   Term Care

 

 

   1. {H} Provide an above-the-

 

      line deduction for long-

 

      term care insurance for which

 

      the taxpayer pays at least

 

      50% of the premium, phased

 

      in as follows: 25% in 2002

 

      through 2004, 35% in 2005, 65%

 

      in 2006, and 100% thereafter;

 

      {S} Above-the-line deduction

 

      for 100% of premiums for long-

 

      term care insurance for

 

      individuals not participating

 

      [in employer-subsidized plan

 

      [H = tyba 12/31/01

 

      S = tyba 12/31/99]              -369     -423   -1,174   -9,716

 

 

   2. {H} Allow long-term care

 

      insurance to be offered as

 

      part of cafeteria plans,

 

      limited to amount of deduc-

 

      tible premiums; allow long-

 

      term care services to be

 

      reimbursed under a flexible

 

      spending arrangement /2/;

 

      {S} Allow long-term care

 

      insurance to be offered as

 

      part of cafeteria plans 2

 

      [H = tyba 12/31/01

 

      S = tyba 12/31/99]              -167     -185     -606   -1,394

 

 

   3. Provide an additional

 

      personal exemption to

 

      caretakers of elderly

 

      family members

 

      [tyba 12/31/00]                 -285     -291   -1,308   -2,798

 

 

   4. Study of long-term care

 

      needs in the 21st century

 

      [DOE]                                   No Provision

 

 

E. Increase the Time Period for

 

   Measuring Eligible Expenses

 

   Qualifying for the Orphan

 

   Drug Tax Credit

 

   [epoia 12/31/00]                    -10      -11      -46     -117

 

 

F. {H} Add certain vaccines

 

   against Streptococcus

 

   Pneumoniae to the list of

 

   taxable vaccines in the Federal

 

   vaccine insurance program /3/;

 

   study of Federal vaccine

 

   insurance program /3/; reduce

 

   excise tax on all taxable

 

   vaccines to $0.50 per dose

 

   beginning in 2005 /4/; {S} Add

 

   certain vaccines against

 

   Streptococcus Pneumoniae to the

 

   list of taxable vaccines in the

 

   Federal vaccine insurance

 

   program

 

   [tyba 12/31/04]                     ---      -35      -35     -271

 

 

G. Credit for Clinical Testing

 

   Research Expenses Attributable

 

   to Certain Qualified Academic

 

   Institutions Including Teaching

 

   Hospitals

 

   [tyba 12/31/00]                      -1       -5       -8      -62

 

 

H. Application of Patients' Bill

 

   of Rights to Group Health

 

   Plans -- require that health

 

   plans comply with patients'

 

   bill of rights provisions 6

 

   [1/1/01]                              Negligible Revenue Effect

 

 

I. Right to Information About

 

   Plans 6

 

   [DOE + 1 year]                              No Provision

 

 

J. Women's Health and Cancer

 

   Rights -- require that health

 

   plans provide coverage for

 

   minimum hospital stays for

 

   certain breast cancer treatments

 

   6 /7/

 

   [DOE]                                       No Provision

 

 

K. Genetic Information and Services

 

   -- prohibit discrimination on the

 

   basis of predictive genetic

 

   information 6

 

   [pyba DOE + 1 year ]                        No Provision

 

 

L. Carryover of Unused Health and

 

   Dependent Care Benefits from

 

   Cafeteria Plans and Flexible

 

   Spending Arrangements

 

   [tyba 12/31/99]                             No Provision

 

 

   TOTAL OF HEALTH-RELATED REVENUE

 

   PROVISIONS                       -3,019   -3,530  -12,984  -68,509

 

 

II. INDIVIDUAL RETIREMENT ARRANGE-

 

    MENTS INCREASE THE income limit

 

    FOR CONVERSION OF AN IRA TO A

 

    ROTH IRA TO $1 MILLION

 

    [tyba 12/31/99]                            No Provision

 

 

III. REVENUE OFFSET PROVISIONS

 

 

A. Modify Foreign Tax Credit

 

   Carryback

 

   [tyba 12/31/01]                             No Provision

 

 

B. Limit Use of Non-Accrual

 

   Experience Method of Accounting

 

   [tyea DOE]                                  No Provision

 

 

C. Information Reporting on

 

   Cancellation of Indebtedness

 

   by Non-Bank Financial

 

   Institutions

 

   [---]                                       No Provision

 

 

D. Extend IRS User Fees Through

 

   [9/30/09 /8/]

 

   [9/30/03]                                   No Provision

 

 

E. Property Subject to a Liability

 

   Under Section 357

 

   [---]                                       No Provision

 

 

F. Deny Deduction and Impose

 

   Excise Tax With Respect to

 

   Charitable Split-Dollar Life

 

   Insurance Arrangements

 

   [---]                                       No Provision

 

 

G. Allow Employers to Transfer

 

   Excess Defined Benefit

 

   Plan Assets to a Special Account

 

   for Health Benefits of Retirees

 

   (through 9/30/09) 9

 

   [tmi tyba 12/31/00]                         No Provision

 

 

H. Impose Limitation on Prefunding

 

   of Certain Employee Benefits

 

   [cpa DOE]                                   No Provision

 

 

I. Repeal Installment Method for

 

   Accrual Taxpayers and Modify

 

   Pledge Rules

 

   [---]                                       No Provision

 

 

   TOTAL OF REVENUE OFFSET

 

   PROVISIONS                                  No Provision

 

_____________________________________________________________________

 

NET TOTAL                           -3,019   -3,530  -12,984  -68,509

 

_____________________________________________________________________

 

 

                          [table continued]

 

_____________________________________________________________________

 

                                              Senate Amendment

 

                                      _______________________________

 

[Effective]                           2000     2001     2002     2003

 

_____________________________________________________________________

 

 

I. HEALTH-RELATED REVENUE

 

   PROVISIONS

 

 

A. Provide an above-the-line

 

   deduction for health insurance

 

   for which the taxpayer pays at

 

   least 50% of the premium,

 

   phased in as follows:  25% in

 

   2002 through 2004, 35% in 2005,

 

   65% in 2006, and 100%

 

   thereafter

 

   [tyba 12/31/01]                             No Provision

 

 

D. Provisions Relating to Long-

 

   Term Care

 

 

   1. {H} Provide an above-the-

 

      line deduction for long-

 

      term care insurance for which

 

      the taxpayer pays at least

 

      50% of the premium, phased

 

      in as follows: 25% in 2002

 

      through 2004, 35% in 2005, 65%

 

      in 2006, and 100% thereafter;

 

      {S} Above-the-line deduction

 

      for 100% of premiums for long-

 

      term care insurance for

 

      individuals not participating

 

      [in employer-subsidized plan

 

      [H = tyba 12/31/01

 

      S = tyba 12/31/99]            -1,576   -1,693   -6,905  -17,164

 

 

   2. {H} Allow long-term care

 

      insurance to be offered as

 

      part of cafeteria plans,

 

      limited to amount of deduc-

 

      tible premiums; allow long-

 

      term care services to be

 

      reimbursed under a flexible

 

      spending arrangement /2/;

 

      {S} Allow long-term care

 

      insurance to be offered as

 

      part of cafeteria plans 2

 

      [H = tyba 12/31/01

 

      S = tyba 12/31/99]               -98     -108     -478   -1,189

 

 

   3. Provide an additional

 

      personal exemption to

 

      caretakers of elderly

 

      family members

 

      [tyba 12/31/00]                          No Provision

 

 

   4. Study of long-term care

 

      needs in the 21st century

 

      [DOE]                                  No Revenue Effect

 

 

E. Increase the Time Period for

 

   Measuring Eligible Expenses

 

   Qualifying for the Orphan

 

   Drug Tax Credit

 

   [epoia 12/31/00]                            No Provision

 

 

F. {H} Add certain vaccines

 

   against Streptococcus

 

   Pneumoniae to the list of

 

   taxable vaccines in the Federal

 

   vaccine insurance program /3/;

 

   study of Federal vaccine

 

   insurance program /3/; reduce

 

   excise tax on all taxable

 

   vaccines to $0.50 per dose

 

   beginning in 2005 /4/; {S} Add

 

   certain vaccines against

 

   Streptococcus Pneumoniae to the

 

   list of taxable vaccines in the

 

   Federal vaccine insurance

 

   program

 

   [tyba 12/31/04]                           Previously Enacted

 

 

G. Credit for Clinical Testing

 

   Research Expenses Attributable

 

   to Certain Qualified Academic

 

   Institutions Including Teaching

 

   Hospitals

 

   [tyba 12/31/00]                             No Provision

 

 

H. Application of Patients' Bill

 

   of Rights to Group Health

 

   Plans -- require that health

 

   plans comply with patients'

 

   bill of rights provisions 6

 

   [1/1/01]                                    No Provision

 

 

I. Right to Information About

 

   Plans 6

 

   [DOE + 1 year]                       Negligible Revenue Effect

 

 

J. Women's Health and Cancer

 

   Rights -- require that health

 

   plans provide coverage for

 

   minimum hospital stays for

 

   certain breast cancer treatments

 

   6 /7/                                  Estimated Forthcoming

 

   [DOE]                                           From CBO

 

 

K. Genetic Information and Services

 

   -- prohibit discrimination on the

 

   basis of predictive genetic

 

   information 6

 

   [pyba DOE + 1 year]                   Negligible Revenue Effect

 

 

L. Carryover of Unused Health and

 

   Dependent Care Benefits from

 

   Cafeteria Plans and Flexible

 

   Spending Arrangements

 

   [tyba 12/31/99]                    -748     -856   -3,244   -8,538

 

 

   TOTAL OF HEALTH-RELATED REVENUE

 

   PROVISIONS                       -2,836   -3,115  -15,630  -34,847

 

 

II. INDIVIDUAL RETIREMENT ARRANGE-

 

    MENTS INCREASE THE income limit

 

    FOR CONVERSION OF AN IRA TO A

 

    ROTH IRA TO $1 MILLION

 

    [tyba 12/31/99]                 -1,250   -2,478    2,745  -10,043

 

 

III. REVENUE OFFSET PROVISIONS

 

 

A. Modify Foreign Tax Credit

 

   Carryback

 

   [tyba 12/31/01]                     560      521    1,806    3,599

 

 

B. Limit Use of Non-Accrual

 

   Experience Method of Accounting

 

   [tyea DOE]                           31       15      226      296

 

 

C. Information Reporting on

 

   Cancellation of Indebtedness

 

   by Non-Bank Financial

 

   Institutions

 

   [---]                                    Previously Enacted

 

 

D. Extend IRS User Fees Through

 

   [9/30/09 /8/]

 

   [9/30/03]                            50       53      103      410

 

 

E. Property Subject to a Liability

 

   Under Section 357

 

   [---]

 

 

F. Deny Deduction and Impose

 

   Excise Tax With Respect to

 

   Charitable Split-Dollar Life

 

   Insurance Arrangements

 

   [---]                                     Previously Enacted

 

 

G. Allow Employers to Transfer

 

   Excess Defined Benefit

 

   Plan Assets to a Special Account

 

   for Health Benefits of Retirees

 

   (through 9/30/09) 9

 

   [tmi tyba 12/31/00]                 ---      ---      ---      156

 

 

H. Impose Limitation on Prefunding

 

   of Certain Employee Benefits

 

   [cpa DOE]                           136      125      763    1,175

 

 

I. Repeal Installment Method for

 

   Accrual Taxpayers and Modify

 

   Pledge Rules

 

   [---]

 

 

   TOTAL OF REVENUE OFFSET

 

   PROVISIONS                          777      714    2,898    5,636

 

_____________________________________________________________________

 

NET TOTAL                           -3,309   -4,879   -9,987  -39,254

 

_____________________________________________________________________

 

 

Joint Committee on Taxation

 

 

NOTE: Details may not add to totals due to rounding. Enactment date

 

      is assumed to be April 1, 2000.

 

 

Legend: {H} = House bill

 

        {S} = Senate amendment

 

 

Legend for "Effective" column:

 

        cpa = contributions paid after

 

        DOE = date of enactment

 

        epoia = expenses paid or incurred after

 

        pyba = plan years beginning after

 

        pybo/a = plan years beginning on or after

 

        tmi = transfers made in

 

        tyba = taxable years beginning after

 

        tyea = taxable years ending after

 

FOOTNOTES

 

 

1 Negligible revenue effect.

2 Estimate assumes concurrent enactment of the above-the-line deduction for long-term care insurance (item I.D.1.)

3 This portion of the House bill was previously enacted.

4 This estimate reflects the recent withdrawal of the rotavirus vaccine from the market.

5 Loss of less than $500,000.

6 An excise tax in imposed on group health plans that fail to meet certain requirements. This provision expands the requirements that apply to group health plans. It is estimated that the provision will have a negligible effect on excise tax revenues.

7 This provision will have other indirect revenue effects. The Congressional Budget Office will provide an estimate of these indirect effects.

8 Estimate provided by the Congressional Budget Office.

9 This provision was extended through 12/31/05 by the "Ticket to Work and Work Incentives Improvement Act of 1999."

 

END OF FOOTNOTES
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