Taxes: Sketching last 20 years of tax reform
CONGRESS has a perennial urge to reform taxes. ``The tax code is always in a state of becoming,'' says Kenneth M. Brown, senior economist at the Congressional Joint Economic Committee.
Experts say reforms often succeed in closing some old loopholes while opening new ones. Although reform efforts have been plentiful, President Reagan's tax-reform plan is ``the most extensive in recent years,'' Mr. Brown says. Other reform attempts in the last two decades include:
The Deficit Reduction Act of 1984. This was designed to raise revenue, but it also closed various loopholes. For example, it restricted tax breaks for expensive cars, cracked down on low-interest loans between family members, and put limits on tax-exempt industrial development bonds.
The Tax Equity and Fiscal Responsibility Act of 1982. Aside from raising revenue, this law also imposed a more comprehensive minimum tax on wealthy individuals, required withholding on interest and dividend income (later repealed), and scaled back business tax breaks enacted in 1981.
The Revenue Act of 1978. President Carter proposed reforms including limits on preferential capital-gains treatment and restrictions on business-expense deductions. Congress turned its back on his proposals and enacted a range of tax cuts, several of which benefited middle- and upper-income individuals.
The Tax Reform Act of 1976. Congress cracked down on oil and gas tax shelters, boosted the minimum tax on corporations and individuals, and set limits on business-expense deductions. The measure also provided several new special-interest tax breaks.
The Tax Reform Act of 1969. This law repealed the investment tax credit, included a watered-down reduction in the oil depletion allowance, but left other loopholes in place. It also exempted the poorest Americans from paying income tax.
The Revenue Act of 1964. President Kennedy in 1963 proposed a massive tax cut, which he sought to finance by limiting total itemized deductions and triming oil-industry tax breaks. Congress enacted the tax cuts, but many of the proposed reforms were ignored. CHART: Who Bears the Tax Burden Share of federal government budget receipts by percent 194540.735.47.613.92.4 195039.926.511.019.13.4 195543.927.312.014.02.8 196044.023.215.912.64.2 196541.821.819.012.54.9 197046.917.023.08.14.9 197543.914.6126.96.36.199 198047.212.5188.8.131.52 1985*44.79.036.45.04.8 ( Fiscal year)(estimate) Individual Income Taxes. Corporation Income Taxes. Social Insurance Taxes and Contributions. Excise Taxes. All Other Receipts. Source: Office of Management and Budget