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Y 4.F 49: S. hrg. 98-205 S. Hao. 98-205

HRG.

1983-84 MISCELLANEOUS TAX BILLS, II

HEARING

BEFORE THE

SUBCOMMITTEE ON

22-894 O

TAXATION AND DEBT MANAGEMENT

OF THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

NINETY-EIGHTH CONGRESS

CIS RECORD ONLY:

FIRST SESSION

S. 654, S. 738, S. 1147, S. 1194, and S. 1195

ON

MAY 27, 1983

Printed for the use of the Committee on Finance

JONSSON

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1983

STANFORD UNIVERSITY

FEB 1984

LIBRARY OF

GOVT

DOCUMENTS

COMMITTEE ON FINANCE

ROBERT J. DOLE, Kansas, Chairman

BOB PACKWOOD, Oregon
WILLIAM V. ROTH, JR., Delaware
JOHN C. DANFORTH, Missouri
JOHN H. CHAFEE, Rhode Island
JOHN HEINZ, Pennsylvania
MALCOLM WALLOP, Wyoming
DAVID DURENBERGER, Minnesota
WILLIAM L. ARMSTRONG, Colorado
STEVEN D. SYMMS, Idaho.
CHARLES E. GRASSLEY, Iowa

RUSSELL B. LONG, Louisiana
LLOYD BENTSEN, Texas

SPARK M. MATSUNAGA, Hawaii

DANIEL PATRICK MOYNIHAN, New York

MAX BAUCUS, Montana
DAVID L. BOREN, Oklahoma
BILL BRADLEY, New Jersey
GEORGE J. MITCHELL, Maine
DAVID PRYOR, Arkansas

RODERICK A. DEARMENT, Chief Counsel and Staff Director
MICHAEL STERN, Minority Staff Director

JOHN C. DANFORTH, Missouri
JOHN H. CHAFEE, Rhode Island
MALCOLM WALLOP, Wyoming
WILLIAM L. ARMSTRONG, Colorado

SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT

BOB PACKWOOD, Oregon, Chairman

SPARK M. MATSUNAGA, Hawaii
LLOYD BENTSEN, Texas
MAX BAUCUS, Montana
RUSSELL B. LONG, Louisiana

(II)

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CONTENTS

ADMINISTRATION WITNESS

Hon. John E. Chapoton, Assistant Secretary for Tax Policy, Department of
the Treasury.....

PUBLIC WITNESSES

American Council on Education, James C. Olson

Association of American Universities, James C. Olson
American Vocational Association, Gene Bottoms
Bottoms, Gene, American Vocational Association

Computer and Business Equipment Manufacturers Association, Kevin T. Con-
sidine

Considine, Kevin T., on behalf of Computer and Business Equipment Manu-
facturers Association..

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86

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273

263

285

00

183

154

68

79

96

169

213

Page

Prepared statement of-Continued

265

Scott D. Thomson, National Association of Secondary School Principals..... 256
Dr. Peter F. McCrea, for the Scientific Apparatus Makers Association........
Theo Pitt, Jr., for U.S. League of Savings Institutions....

278

275

David A. Cramer, managing director, PUMP Financial Services, Inc....
National Association of Mutual Savings Banks, Keith G. Willoughby .

287

COMMUNICATIONS

Letter and statement on Senate Bills S. 738, S. 1194, and S. 1195, Arthur
Andersen & Co.......

Statement of Bernard L. Hardiek, director of taxes, Deere & Co

Letter on S. 654 from The Foxboro Co....

IBM Corp. statement.

Statement, Machinery and Allied Products Institute..

Statement on S. 1194 and S. 1195, Saul K. Fenster, president, New Jersey
Institute of Technology

Letter on S. 1195 from Norman Hackerman, president, Rice University
Letter on S. 1194 and S. 1195 from Tandy Corp./Radio Shack
Statement on S. 738 and S. 654, Tax Executive Institute, Inc
Letter on S. 654 and S. 738 from Varian Associates, Inc..

Article from the New York Times, "Plugging Teachers Into Computer Era".
Article from The Wall Street Journal, "Learning How To Use Computers Is
Frightening Experience for Many"

Article from The Miami News, "Computer Confusion in the Dade Classroom'
Statement of Timex Computer Corp.
Letter from Federal National Mortgage Association.

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1983-84 MISCELLANEOUS TAX BILLS-II

MAY 27, 1983

U.S. SENATE, SUBCOMMITTEE ON TAXATION AND DEBT MANAGEMENT, COMMITTEE ON FINANCE,

Washington, D.C.

The subcommittee met, pursuant to notice, at 9:07 a.m. in room SD-215, Dirksen Senate Office Building, Hon. John C. Danforth presiding.

Present: Senators Danforth and Heinz.

[The press release announcing the hearing, background information on S. 738, S. 1147, S. 1194, and S. 1195, and the prepared statement of Senator Bensten follow:]

PRESS RELEASE No. 83-139

[For immediate release-May 9, 1983]

U.S. SENATE, COMMITTEE ON FINANCE, SUBCOMMITTEE ON TAXATION AND DEBT

MANAGMENT

FINANCE SUBCOMMITTEE ON TAXATION AND DEBT Managment SETS HEARING ON FIVE MISCELLANEOUS TAX BILLS

Senator Bob Packwood, Chairman of the Subcommittee on Taxation and Debt Management, announced today that a hearing will be held on Friday, May 27, 1983, on five miscellaneous tax bills.

The hearing will begin at 9:00 a.m. in Room SD-215 of the Dirksen Senate Office Building.

The following legislative proposals will be considered:

S. 654.-Introduced by Senator Wallop and others. S. 654 would permit the deduction of all research and experimentation expenditures for research conducted in the United States against U.S. source income.

S. 738.-Introduced by Senator Danforth and others. S. 738 would make permanent the credit for increasing activity.

S. 1147.-Introduced by Senators Danforth and Tsongas. S. 1147 would exclude from income amounts arising out of the discharge of indebtedness on a principal residence.

S. 1194.-Introduced by Senator Danforth.

S. 1195.-Introduced by Senators Bentsen and Chafee.

S. 1194 and S. 1195 would increase the charitable contribution deduction for certain scientific equipment, expand the tax credit for research activities and extend the exclusion from income for certain amounts received by students.

STATEMENT OF SENATOR LLOYD BENSTEN

Mr. Chairman: The R&D bills being discussed today have three major components:

Expansion of the R&D tax credit to cover faculty salaries and graduate student

aid;

Expansion of the charitable deduction provision to include high-tech equipment donated for teaching purposes to colleges and VocEd schools;

(1)

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