Page 2. Gasoline tax.... 1. Diesel fuel tax. C. SOCIAL SECURITY AND FUTA PROVISIONS... 1336 1337 1339 1. Re-election of social security coverage by cer- 1339 2. Application of FUTA tax to certain Indian 1340 3. Treatment of certain technical personnel........ 1341 D. OTHER PROVISIONS 1346 1. Exclusion from gross income for certain foster 1346 2. Reinstatement of rules for spouses of Vietnam 1347 3. Tax exemption for certain reindeer-related 1348 4. Due dates for certain HHS quality control 5. Adoption assistance program of the Social Se- APPENDIX: Estimated Revenue Effects of the Act .................. TABLE A-1. SUMMARY OF ESTIMATED BUDGET EFFECTS OF 1349 1350 .............. 1353 1354 TABLE A-2. ESTIMATED BUDGET EFFECTS OF THE PROVI- 1359 LETTER OF TRANSMITTAL U.S. CONGRESS, JOINT COMMITTEE ON TAXATION, Hon. DAN ROSTENKOWSKI, Chairman, DEAR MESSRS. CHAIRMEN: This document, the General Explanation of the Tax Reform Act of 1986 (P.L. 99-514), was prepared by the staff of the Joint Committee on Taxation, in consultation with the staffs of the House Committee on Ways and Means and the Senate Committee on Finance. It is comparable to similar material prepared by the Joint Committee staff with respect to other major revenue acts in recent years. A committee report on legislation issued by a Congressional committee sets forth the committee's explanation of the bill as it was reported by that committee. In some instances, a committee report does not also serve as an explanation of the final provisions of the legislation as enacted by the Congress. This is because the versions of the bill reported by the House and Senate committees may differ significantly from the versions of the bill as passed by the House, as passed by the Senate, or as enacted after action by a conference committee. The Tax Reform Act of 1986, because of its comprehensive scope and the numerous changes which were made to the bill by the Senate and the conference committee, is an example of legislation with respect to which the differences between provisions of the reported bill or committee amendment and provisions of the public law are significant. The first part of the document is an overall chronology of the legislative background of the Act in the 99th Congress. (In addition to this overall chronology, specific references to the legislative background of each provision of the Act are set forth in footnotes accompanying the explanations of the provisions in the third part of the document.) The second part presents the general reasons for the legislation. The third part consists of explanations of the provisions of the Act. (Title XVIII of the Act, making technical corrections to prior tax legislation, is not described in this document.) An appendix sets forth the estimated budget effects of the provisions of the Act described in the document for fiscal years 1987-1991. Sincerely yours, DAVID H. BROCKWAY, Chief of Staff. I. LEGISLATIVE BACKGROUND OF THE ACT The following is an overall chronology of the legislative background in the 99th Congress of H.R. 3838, the Tax Reform Act of 1986 (Public Law 99-514).1 A. Administration Tax Reform Proposal In May 1985, President Reagan submitted the Administration's tax reform proposals to the Congress.2 Previously, the Treasury Department, in response to the President's request in his 1984 State of the Union Address, had conducted a comprehensive study of the U.S. tax system and submitted the results of the study with recommendations to the President in November 1984.3 B. House Action Ways and Means Committee H.R. 3838 was introduced and ordered favorably reported by the House Committee on Ways and Means on December 3, 1985, after almost a year-long review of tax reform proposals by the full committee and subcommittees in public hearings and in markup consideration. The following is an overview of full committee and subcommittee activity on tax reform legislation during 1985. Committee hearings The Ways and Means Committee held 30 days of full committee public hearings on comprehensive tax reform proposals. The committee began public hearings on comprehensive tax reform proposals on February 27, 1985. Committee hearings on tax reform issues continued on March 26; May 30; June 4, 5, 7, 11-14, 17, 18, 20, 2427; and July 8-12, 17, 19, 22, 25, 26, 29-31, 1985. Also, a committee hearing was held on May 16, 1985, on proposed technical corrections to the Deficit Reduction Act of 1984 (P.L. 98-369) and the Retirement Equity Act of 1984 (P.L. 98-397). The committee's tax reform hearing consideration included 1984 Treasury Department recommendations, the President's tax reform proposal made in May 1985, as well as various Congressional and other proposals. 1 In addition to this overall chronology of the Act, specific references to the legislative background of each provision are set forth in footnotes accompanying the explanation of the provisions in Part III of this document. These legislative background references include, as appropriate, citations to the following: H.R. 3838, as reported by the House Committee on Ways and Means on December 7, 1985 (H. Rep. 99-426); H.R. 3838, as reported by the Senate Committee on Finance on May 29, 1986 (S. Rep. 99-313); House and Senate floor amendments to H.R. 3838; and the conference report on H.R. 3838 as filed on September 18, 1986 (H. Rep. 99-841). 2 The White House, The President's Tax Reform Proposals to the Congress for Fairness, Growth, and Simplicity, May 1985. Treasury Department, Tax Reform for Fairness, Simplicity, and Economic Growth, November 1984. |