CONTENTS 495, 501-503, 544–545, 645, 663, 672, 682–688, 706–708, 757-767 Clinton P. Anderson--- 628-630, 632-634, 643, 654, 696–702, 705, 711-716, 721-723 Hon. David M. Kennedy, Secretary of the Treasury, accompanied by: Charls E. Walker, Under Secretary of the Treasury; Edwin S. Cohen, Assistant Secretary of the Treasury for Tax Policy; John S. Nolan, Deputy Assistant Secretary of the Treasury for Tax Committee on Finance press release announcing tax reform hearings__. 3 726 Single persons under 35, House proposal--- 691 Revised tax law and tax-exempt securities-Amendment No. 141 to H.R. 523 Selected tables: Page Assets of private foundations, 1930-68- Tax under present law and tax change under H.R. 13270 and the 50 percent by stockholders and 50 percent by consumers. 100 percent by consumers-- Effect of current Treasury proposals on calendar year liabilities---Calendar year liability of revenue estimates (Treasury proposals) __ Summary of H.R. 13270, prepared by the staffs of the Joint Committee on Internal Revenue Taxation and the Committee on Finance__. Unlimited charitable contributions deduction, Treasury position on_-_-_ Appendix A Technical memorandum of Treasury position on H.R. 13270--- 709 759 759 759 765 766 7 658 769 TAX REFORM ACT OF 1969 THURSDAY, SEPTEMBER 4, 1969 U.S. SENATE, COMMITTEE ON FINANCE, Washington, D.C. The committee met, pursuant to notice, at 10:10 a.m., in room G-308, New Senate Office Building, Senator Russell B. Long (chairman) presiding. Present: Senators Long, Anderson, Gore, Talmadge, Hartke, Fulbright, Harris, Byrd, Jr., of Virginia, Williams, Bennett, Curtis, Miller, Jordan of Idaho, Fannin, and Hansen. OPENING STATEMENT OF THE CHAIRMAN The CHAIRMAN. This hearing will come to order. Today the Committee on Finance begins the task of reform. The bill before us covers 368 pages of bewildering complexity and it has been described as the most significant tax reform legislation that Congress has ever undertaken. It involves more than $16 billion in revenues; $7 billion in tax increases, and $9 billion in tax cuts. In one respect or another this bill would touch the lives and livelihood of every person in America. It would exert influences on our financial system and would leave its mark on our capital markets. Our churches, schools, and colleges would feel its impact. So would those responsible for the operation of our State and local governments. Our major industries, without exception, will find higher taxes their legacy under the bill. Some of our industries-such as the natural resources industry and the homebuilding industry-would be affected. by several features of the House bill. Private foundations, whose existence stems from generous tax rules which not only reward donors for their contributions but also covers foundation incomes with a cloak of tax immunity, are a special target of this tax reform bill. Individuals who today pay more taxes than they should will find their burdens lightened by the bill while those who pay less than they should will find a heavier burden to carry. The bill tightens up on the the loose ends and loosens up on the tight ends. Truly, this is a significant bill. It contains much that is good. But those who seek a simple law, one that ordinary taxpayers and businessmen can read and determine how much tax they owe, will find little comfort in this bill. It is a mighty complicated bill, and its provisions are already confounding the best tax minds in the country. (1) Because of this complexity, I am making the request on the Treasury Department this morning that when the Committee on Finance goes into executive session on this bill that the Treasury Department furnish us with copies of the tax return forms and schedules as they would need to be modified to carry out the provisions of the bill. The goal of this bill is tax justice. If we find the bill creates a greater injustice in some areas than it seeks to correct, then no doubt we will change the bill in that respect. Similarly, if we find desirable features which have been omitted from the bill, we will add them to it. This is the legislative procedure recited in the Constitution by those who founded our country. It is the only way by which the Senate can act in tax matters. During the next 412 weeks the committee will hear approximately 300 witnesses in public hearing. Some will favor the bill; others will oppose it or some part of it. But in the process of listening to them and in discussing the issues raised by their testimony, the committee members will gain an insight-a "feel"-for what the bill does, how it works, who it affects, and why, that will guide us as we move from the public hearing phase of our work into closed-door executive sessions to mark up the bill. I see here by the Treasury suggestions that in a note as indicated in page 19 of Assistant Secretary Cohen's statement a more detailed memorandum making further recommendations will not be available to the Committee on Finance until a later date. At such time they will be printed as a separate document and will be made available to the general public. It would seem to me that the technical memorandum should be available to us before public witnesses are heard.* Otherwise I do not understand how public witnesses can address themselves to the specifics, and I would hope that that can be made available to us by the time public witnesses appear, particularly those segments of those recommendations that have to do with what the particular public witnesses are testifying about. I think it well to include at this point in the record material related to these hearings. Let us include our press release announcing these hearings, our staffs' summary of the bill, and the bill itself, H.R. 13270. While the bill is rather voluminous it will serve to provide a more complete record. (The material referred to follows. Testimony begins on page 495.) *The Treasury Department Technical Memorandum referred to was received by the Committee and printed as a separate document. It has also been included in this volume of hearings as appendix A. PRESS RELEASE FOR IMMEDIATE RELEASE COMMITTEE ON FINANCE UNITED STATES SENATE 2227 New Senate Office Bldg. TAX REFORM HEARINGS Honorable Russell B. Long, Chairman, Committee on Finance, announced today that on Thursday, September 4, 1969, the Committee would begin hearings on H. R. 13270, the Tax Reform Act of 1969. The hearing will begin at 10:00 a. m. on Thursday, September 4 in the Senate Auditorium, Room G-308, New Senate Office Building. Administration Witness He stated that the lead-off witness would be the Honorable David M. Kennedy, Secretary of the Treasury, who would testify on Thursday, September 4 and Friday, September 5. Public Witnesses. He stated further that public witnesses testifying on tax reform would be scheduled beginning Monday, September 8, 1969, and continuing through Friday, October 3, 1969. Following the hearing, the Committee will begin closed-door mark-up sessions on the bill. The Chairman noted that because of the particularly comprehensive nature of the House tax reform bill, an unusually large number of witnesses are expected at the hearing. For this reason, he stated that it would be necessary to very carefully control the time allotted for oral presentations before the Committee. Legislative Reorganization Act. In this respect, the Chairman observed that the Legislative Reorganization Act of 1946, as amended, requires all witnesses appearing before the Committees of Congress "to file in advance written statements of their proposed The statute also directs the staff of each Committee to prepare digests of all testimony for the use of Committee members. Senator Long stated that in light of this statute and in view of the large number of witnesses who desire to appear before the Committee in the limited time available for the hearing, all witnesses who are scheduled to testify must comply with the following rules: (1) All statements must be filed with the Committee at least two days (3) |