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The original documents are located in Box 32, folder "Taxes - General" of the John Marsh
Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
JUL 1 1975
THE WHITE HOUSE
WASHINGTON
M
Date: 6.30.75
TO: Jack marsh
FROM: Max L. Friedersdorf
For Your Information
Please Handle
Please See Me
Comments, Please
Other FORD LIE halmy (A/m
&
BERALD
Digitized from Box 32 of the John Marsh Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
WASHINGTON
June 30, 1975
MEMORANDUM FOR:
MAX L. FRIEDERSDORF
THROUGH:
VERN LOEN
VL
FROM:
TOM LOEFFLER
V.Z.
SUBJECT:
Committee on Ways and Means --
Tax Reform Consideration
The Committee on Ways and Means is holding tax reform hearings
which commenced on Monday, June 23, 1975. This begins the first
phase of a series of tax reform hearings, the second phase of which
will begin in November of this year after completion of development
and passage of the bill resulting from the hearings now ongoing.
The first set of public hearings on tax reform will be in three parts:
(1) panel discussions on the objectives and approaches to tax reform;
(2) testimony from Administration officials beginning July 8; and
(3) presentation of testimony from the interested public. These first-
phase hearings are scheduled to be completed by the end of July.
Mark-up sessions should begin in early September after the August
recess.
TOPICS FOR TAX REFORM CONSIDERATION
IN FIRST PHASE
1. Tax shelters and minimum tax.
2. Tax simplification and reform of domestic income of
individuals.
3. Foreign income.
4. Administrative provisions.
5. Repeal and revision of obsolete, rarely used, etc.
provisions.
6. Extension of individual and corporate tax reductions
provided in the Tax Reduction Act of 1975.
- 2 -
7. Capital formation (including fast depreciation, invest-
ment credit, and integration of corporate and individual
taxes).
8. Capital gain and losses.
TOPICS LIKELY TO BE GIVEN TAX REFORM
CONSIDERATION IN SECOND PHASE
1. Estate and gift taxation.
2. Tax treatment of single persons and married couples.
3. Tax exempt state and municipal bonds.
4. Small business tax problems including Subchapter S.
5. Percentage depletion for minerals generally.
6. Tax treatment of financial institutions.
7. Tax treatment of cooperatives.
8. Tax treatment of insurance companies, including casualty
and life companies.
9. Tax exempt organizations including private foundations.
10. Charitable contribution deductions.
11. Net operating loss deductions.
12. Bank holding companies; real estate investment trusts.
13. Excise taxes.
14. Integration of pensions and social security.
15. Tax treatment of annuities.
CC: Charlie Leppert
Bill Kendall
Pat O'Donnell
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
1.8.1975
THE WHITE HOUSE
WASHINGTON
From: Robert T. Hartmann Rth
by neta m
Don Rumsfeld
To:
Jack Marsh
x36xXxx
Date:
October 17, 1975
Time
p.m.
I have been requested by my friend,
Jim Bass, Vice President of American
Airlines, to provide copies of this
to you for your information.
R- - copies
FORD is LIBRARY
1. Seiden
2. Simman done 10/21
Attachment 1
THE CASE FOR LEGISLATION TO REFUND EARNED BUT
EXPIRING INVESTMENT TAX CREDITS
I. Administration Position Statements On
Refunding Unused Investment Tax Credits
1. On October 8, 1974, in addressing a Joint Session
of Congress, President Ford stated:
"To help industry to buy more machines and
create more jobs, I am recommending a
liberalized 10 percent investment tax credit.
This credit should be especially helpful to
capital-intensive industries, such as
primary metals, public utilities, where
capacity shortages have developed."
The White House Fact Sheet provided the following details
regarding the Administration's Investment Tax Credit
proposals:
"Replace the present limit on the maximum
credit which may be claimed with eventual
full refundability for the excess of
credits over tax liability. Credits in
excess of the present limitations may be
carried back three years and then to the
succeeding three years to offset tax
liability, after which time any remaining
excess credits will be refunded directly to
the taxpayers. This will
-- Help growing companies which have
present investments which are large in
comparison with their current incomes.
FORD
-- Help companies in financial difficul-
ties, which get no benefit from credit
because they have little or no income
tax liability against which to apply it.
-- Help small businesses, which under
present law are more severely affected
by the restrictions and limitations.
2. On December 9, 1974, Assistant Secretary of Treasury
Frederic Hickman made the following remarks concerning the
Administration's investment tax credit proposals:
- 2 -
"A one-sentence summary of the
proposed restructuring is that it repre-
sents a new way of dividing up the
benefit pie.
The businesses that will benefit most
are those for which the present credit works
unfairly -- including, particularly, small
businesses, growing businesses, businesses
in financial difficulty and utilities.
These limitations cause the present
credit to be seriously unneutral.
Because of the income limitation, the
credit offers no assistance at all to
companies in financial difficulty and with
no taxable income. Thus, the companies
for which increased productivity is the
most critical get nothing at all, and the
government is constantly importuned to aid
them in other ways, while their investment
credits simply go down the drain.
The income limitation also causes the
credit to discriminate against the innovative,
growing firm. They are making large invest-
ments now that will produce income in the
future. But they lose the credit because of
the accidental fact that the smaller invest-
ments which they made in the past do not
produce enough income to absorb the credit.
Big companies with steady budgets avoid this
problem. But many smaller companies are
hit hard.
3. On January 15, 1975, in his State of the Union address
to Congress, President Ford noted that:
"This tax cut does not include the more
fundamental reforms needed in our tax
system but it points us in the right
direction -- allowing taxpayers rather than
the Government to spend their pay "
The accompanying Fact Sheet noted that the Administration was
simply deferring its refundability proposal:
- 3 -
"This increase in the credit will
provide benefits of $4 billion in 1975 to
immediately stimulate job-creating invest-
ment. (In view of the need for speedy
enactment and the temporary nature of the
increased credit, this change does not
include the basic restructuring of the
credit as proposed on a permanent basis
in October, 1974.)"
4. On January 16, 1975 Presidential Assistant L.
William Seidman in a press conference underscored the
Administration's hope of dealing with this basic defect
in the Investment Tax Credit:
MR. SEIDMAN: "The basic question is
that a tax credit does not do a company any
good if it is in a loss position and a good
many of the utilities are in that position,
so what are we -doing about it.
First, as part of the tax reform package,
there will again be considered the provision
that was originally suggested; that is, if you
do not have income from which to deduct the
tax credit, it will be paid back to you as a
specific subsidy. That is one possibility.
That is not part of the current one-year
program, but it is very much a possibility
when we get to tax reform."
5. The Administration's last comment in this area came
on July 8, 1975. In his testimony on Tax Reform before the
House Ways and Means Committee, Treasury Secretary William
Simon noted:
"The investment credit has been a
valuable device for reducing the cost and
increasing the supply of capital. It has
been particularly helpful in stimulating
investment in periods of economic sluggish-
ness. However, the credit has discriminatory
aspects and is significantly more helpful to
some kinds of companies and to some kinds of
activities than to others. It is, for example,
of maximum benefit to profitable companies
with assets predominantly in the range from
about 7 to 10 years. On the other hand, it
is of no benefit to companies that are
unprofitable and tends to be of lesser benefit
to small companies and growing companies.
- 4 -
Companies whose assets are predominantly very
long lived are also discriminated against.
These discriminations are magnified as the
credit increases and we have been concerned
about raising the level too far without
trying to remedy the more discriminatory
aspects. A further difficulty with the credit
is that it engenders great political tempta-
tion to turn it off and on, which substantially
lessens its long term effectiveness.
II. Senate Actions to
Refund Unused Tax Credits
1. On July 22, 1975, the Senate Finance Committee
adopted a proposal to allow a refundable income tax credit
for expenditures for insulation of a home. The credit is an
amount equal to 30% of the first $750 of qualified expendi-
tures.
2. Also, on July 22, 1975, the Committee adopted a
proposal to allow a refundable income tax credit for expen-
7
ditures for solar and geothermal energy equipment placed in
a home. The amount of the credit is an amount equal to 40%
of the first $1,000 and 25% of the next $6,400 of qualified
investment.
3. On July 30, 1975, the Senate Finance Committee
adopted a proposal to allow a refundable income tax credit
to individuals age 18 and over. The credit would be equal
to the amount estimated to be the revenue from the windfall
profits tax also adopted by the Committee on decontrolled
oil, plus the additional corporate and individual income
taxes attributable to the decontrol profits, and the revenue
from the existing $2 tariff.
Attachment 2
ESTIMATES OF REVENUE EFFECT OF LEGISLATION TO REFUND EARNED
BUT EXPIRING INVESTMENT CREDITS AT END OF CARRYOVER PERIODS *
1.
Estimates of Credits to be Refunded as Compared with Credits
Usable Under Existing Law ($ amounts in millions)
Credits To Be
Credits To
Percentage of Expir-
Used Under
Expire Under
ing Credits to Used
Year
Present Law
Present Law
Credits
1975
$5,890
$100
1.7%
1976
6,500
150
2.3%
1977
5,500
220
2.6%
TOTALS
$17,890
$470
2.6%
2.
Estimate by Industry of Investment Credits Expiring in 1975,
1976 and 1977 ($ amounts in millions)
1975
1976
1977
Total
% of Total
Agriculture
$0.4
$0.7
$1.1
$ 2.2
.46%
Mining
2.5
5.0
7.8
15.3
3.19%
Construction
0.4
0.9
1.4
2.7
.56%
Manufacturing
14.0
27.0
43.0
84.0
17.49%
(Petrol. Manufac.
already in Mfg.)
2.7
5.6
8.7
17.0
3.54%
Transportation
80.0
100.0
155.0
335.0
69.78%
Communication
1.1
2.2
3.4
6.7
1.39%
Elec. & Gas Util.
1.4
2.8
4.4
8.6
1.79%
Wholesale Trade
0.4
0.7
1.1
2.2
.46%
Retail Trade
1.0
2.1
3.2
6.3
.13%
Finance Etc.
1.0
2.1
3.2
6.3
.13%
Services
1.8
3.5
5.5
10.8
2.25%
TOTAL
$104.
$147.
$229.
$480.1*
*
Estimates prepared by Dr. Gerard Brannon, Professor, Georgetown
University
Attachment 3
UNITED AIRLINES
Office of the Chairman
September 4, 1975
TO:
ALL MEMBERS OF THE HOUSE WAYS AND MEANS COMMITTEE
For many months, United Airlines has been considering the question of a
necessary replacement airplane for part of its existing fleet. Last week,
after reviewing the situation with painstaking care, our company decided
that we must defer indefinitely any decision to purchase the Boeing
727-300 airplane.
We are bringing this matter to your attention because of its national
interest implications and because of the reasons underlying our decision.
Those reasons, as described in the attached press release, bear directly
on Investment Tax Credit legislation now pending before your Committee.
The Boeing 727-300 airplare, as planned, appears to be the best long-run
aircraft to meet the needs of United Airlines. It has specific advantages
over existing aircraft, and offers the prospect of improved productivity.
The unfortunate truth, however, is that, under current and projected
economic conditions, United simply cannot afford to invest in this improved
aircraft type. Continued inflation, sharply escalating fuel costs, and an
uncertain regulatory environment all contributed to United's decision. In
addition, the fact that existing law on Investment Tax Credit does not
offer any incentive to make this significant capital investment was a
critical element in our decision.
This initial purchase of approximately $600 million would have a significant
impact on the manufacturer. Beyond this specific order, there may, in our
judgment, be grave implications for the future of United States aerospace
manufacturing enterprise. This is one of the few remaining technical or
P.O. Box 66100. Chicago, Illinois 60666 Location: Elk Grove Township, Illinois, on Route 62, one-half mile west of Route 83
House Ways & Means Committee Members
September 4, 1975
manufacturing areas in which the United States retains world-wide leader-
ship. If other air carriers are required to reach the same conclusion
as United, the future of United States airframe and engine manufacturers will
be jeopardized.
One way to overcome this serious national problem is to provide a greater
incentive for investment such as proposed in H.R. 8670, now before your
Committee.
Sincerely yours,
Edward Portor
Edward E. Carlson
Chairman
EEC :mhe
Attachments
FORD The
The Wall Street Journal, Sept. 2, 1975
United Airlines
Defers Decision
Economic Regulation
Mr. Carlson said, "The debate about the
On Buying 727s
future of economic regulation of air trans-
portation continues and no one can predict
the outcome. It is unclear whether the air-
lines would be even further hampered by
Boeing Says Indefinite Delay
regulatory constraints."
Airlines can't generate sufficient profits
to take advantage on the investment tax
Will Mean More Layoffs:
credit, he said, because "inhibiting regula-
tory forces crinole air carriers in their at-
Economic Climate Cited
tempts at capital formation and there aren't
any reasonable incentives available to
United to encourage large capital expendi-
A WALL STREET JOURNAL News koundup
tures. Under all these circumstances it sim-
United Airlines, a unit of UAL Inc., de-
ply isn't possible to do any rational planning
ferred indefinitely any decision on whether
for the acquisition of necessary new air-
UNITED AIRLINES
August 29, 1975
FOR IMMEDIATE RELEASE
United Airlines announced on August 28, following the August Board of
Directors meeting, that it has deferred indefinitely a decision whether
to purchase the Boeing 727-300 aircraft.
Edward E. Carlson, Chairman and Chief Executive of United, issued
the following statement:
"The 727-300 has more to offer than any other aircraft for our
fleet needs, and as a long run replacement airplane. However,
a number of factors have combined to foreclose new type equip-
ment purchases at this time. First, the uncertain general economic
climate threatens to extend for some time. Second, future traffic
growth will be stunted by the lack of disposable income and con-
tinued inflation. Third, the rapidly escalating price of fuel has
jeopardized the entire air transportation structure because of the
enormous cost burden on the carriers -- without an opportunity to
recover those costs. Fourth, the debate about the future of
economic regulation of air transportation continues, and no one
can predict the cutcome. It is unclear whether the airlines will
be even further hampered by regulatory constraints.
United and the vast majority of airlines have not be able to
generate sufficient profits to enable them to enjoy the benefits
of the Investment Tax Credit. The critical fact is that inhibiting
regulatory force: cripple air carriers in their attempts at capital
formation, and there are no reasonable incentives available to
United to encourage large capital expenditures. Under all these
circumstances it is simply not possible to do any rational planning
for the acquisition of necessary new aircraft.
United recognizes the necessity and desirability of replacing its
existing fleet. It is also vital to the national interest to maintain
the integrity and strength of our aircraft manufacturing industry.
Without it the United States will surrender its leadership in one
of the few remaining key manufacturing or technical industries.
However, until such time as the general economic climate improves,
and economic incentives for capital investment are provided, it
would not be prudent for United's management to commit itself to
a massive new equipment expenditure. If
FORD
Attachment 4
WORKLAS
Transport Workers Union of America
Affiliated with American Federation of Labor and Congress of Industrial Organizations
OS AMBRICA
LEGISLATIVE DEPARTMENT
100 INDIANA AVE., N. W. WASHINGTON, D. C. 20001 District 7-7407
MICHAEL J. QUILL
INT'L HDQRS., 1980 BROADWAY, NEW YORK, N. Y. 10023 873-6000
International President
1934-1966
October 3, 1975
MATTHEW GUINAN
International President
DOUGLAS L. MAC MAHON
The Honorable Harold E. Ford, Member
Int'l Secretary-Treasurer
House Ways and Means Committee
JAMES F. HORST
U. S. House of Representatives
Int'l Executive Vice President
Washington, D. C. 20515
WILLIAM G. LINDNER
Dear Congressman Ford:
Int'l Vice President.
Director, Air Transport
Division
The Transport Workers Union, AFL-CIO, representing more
than 55,000 members employed by this nation's airlines, is
ERNEST MITCHELL
Int'l Vice President
deeply concerned with the very serious financial difficulties
COPE Director
these airlines are experiencing. We are concerned that unless
their financial crisis improves soon, the impact upon our
FRANCIS A. O'CONNELL
Int'l Executive Council
membership and the economy as a whole will be devastating.
Legislative Director
The attached editorial from The Wall Street Journal of September
25, "Airline Industry Lenders Grow More Doubtful That They Should
and Can Continue Support", brings the airlines financial situa-
tion into focus.
Two bills are pending before the Ways and Means Committee
that will go a long way in helping the airlines solve their
financial problem. H.R.8670 and H.R.8939 provide for the refund
of expiring investment tax credits which the airlines have
already earned through investments in capital equipment. These
investment tax credits, totalling millions of dollars in cash
benefits, will be lost permanently unless the Committee acts
favorably on this legislation.
The Transport Workers Union, AFL-CIO, supports the airlines
in urging your support of H.R.8670 and H.R.8939.
Respectfully yours,
James Exec. Vice President
JFH:bk
opeiu-153-AFL-CIO
Enclosure
FORD of LIBRARY QERALD
Wall Steet Journal
Sep. 25, 1975
Airline Industry Lenders Grow More Doubtful
That They Should and Can Continue Support
By TODD E. FANDELL
Frederick W. Bradley Jr. vice president
The problem plagued airline industry of First National City Bank of New York
has been less than an attraction in the Further, institutional lenders haven't indi
n
stock market recently. Despite improving cated any interest in extending long-term
traffic, long-term earnings prospects are loans to the industry and many banks are
clouded by confusing uncertainties over much less interested in airline loans than
fuel prices, fare levels, labor and other in the past, he adds.
costs, the economy's course and the status
Metropolitan Life Insurance Co. has
of government regulation, combined with been a big airline supporter in the past,
is
the industry's declining and historically in but its airline investments peaked in 1969
to
adequate earnings record
at $607 5 million and have dropped to about
Now, even the usually taciturn lenders $500 million. "It has been six years since
n
are speaking out forcefully. in angry we committed any money to a domestic
October 21
THE WHITE HOUSE
WASHINGTON
TO:
BILL SEIDMAN
FROM: JOHN O. MARSH, JR.
For Direct Reply
For Draft Response
XX
For Your Information
Please Advise
October 21
THE WHITE HOUSE
WASHINGTON
TO:
BILL SIMON
FROM: JOHN O. MARSH, JR,
For Direct Reply
For Draft Response
FORD is 038870 LIBRARY
XX For Your Information
Please Advise
THE WHITE HOUSE
WASHINGTON
September 23, 1976
MEMORANDUM FOR:
MIKE DUVAL
FROM:
JACK MARSH
You may wish to show the President the attached
"Dear Colleague" letter in reference to the higher
education tax credit bill. This is the Roth Amend-
ment which was in the Senate bill and was dropped in
Conference on the big tax reform bill.
This has passed the Senate as an amendment to a
minor bill (Smith College Bill) and is now back in
the House.
Coughlin reports he believes the problem now is that
the measure is being stalled by a failure to appoint
conferees by the Speaker which is more fully set out
in the letter attached.
FORD is LIBRARY 076930
LAWRENCE COUGHLIN
WASHINGTON OFFICE:
13TH DISTRICT, PENNSYLVANIA
306 CANNON BUILDING
(202) 225-6111
DISTRICT OFFICE:
COMMITTEE ON
Congress of the United States
700 ONE MONTGOMERY PLAZA
APPROPRIATIONS
NORRISTOWN, PA. 19401
SUBCOMMITTEES:
house of Representatives
(215) 277-4040
596-1755
FOREIGN OPERATIONS
LEGISLATIVE
Washington, D.C. 20515
September 23, 1976
FOR MEMBER'S IMMEDIATE ATTENTION
Dear Colleague:
I urgently ask your help in bringing higher education tax credit legisla-
tion to a House vote by asking the Speaker to appoint conferees for H.R. 1386 as
soon as possible.
On September 16, the Senate amended H.R. 1386, which passed the House last
Spring, to provide families with tax credits to offset their children's vocational
and higher education expenses. I have been informed, moreover, that when an identi-
cal amendment was dropped by the Tax Reform pct Conference Committee Ways and Means
Chairman Ullman assured the conferees of his efforts to bring the tax credit issue
to a full House vote in the 94th Congress. As of this time, the House has not ap-
pointed conferees to enable this.
All of us are familiar with the Senate's tax credit amendment. A family
would be able to reduce its 1977 tax bill by up to $100 for each child's vocational
or college education expenses. The amount of the credit would increase in $50 in-
crements annually until 1980.
Nearly four dozen Members, from both parties, have sponsored higher educa-
tion tax credit bills. Almost twice this number urged hearings on the tax credit
approach. The Senate has passed such legislation in four of the past five Con-.
gresses, including the 94th Congress. President Ford, himself, publicly endorsed
the tax credit approach to education. Despite this overwhelming bi-partisan support,
the full House has never had the opportunity to express its will.
I, therefore, earnestly enlist your assistance in urging action on this
legislation. It is the last chance for the 94th Congress to go on record on this
important issue. Regardless of our individual opinions on this particular Senate
amendment, I know you will agree to the importance of the issue itself.
Please, write, call, or otherwise relay to the Speaker your desire that con-
ferees for H.R. 1386 be appointed without delay. If you have any questions, or need
further information, please contact Chris of my staff at x56111.
Sincerely,
Sauy
LAWRENCE COUGHLIN
FORD is LIBRARY 038870
FACT SHEET ON TAX CREDITS FOR HIGHER EDUCATION EXPENSES
General:
Almost four dozen Congressmen have sponsored bills providing tax
credits for education costs.
Nearly twice that number urged Ways and Means Committee Chairman Ullman
to hold hearings on the tax credit approach. Hearings were never held.
The Senate has passed tax credit legislation in four of the past
five Congresses, including the 94th Congress. In each instance, the Senate
position was dropped in House-Senate Conferences.
What the present tax credit provision would do:
A family would be able to reduce its 1977 tax bill by up to $100
for each child's vocational or college education expenses. The amount
of the credit allowed would increase by $50 each year until 1980. The credit
would then be $250 per student.
Recent legislative history:
The Tax Reform Act was amended by the Senate to include the above
tax credit provision. The House-Senate Conference Committee, which had
to convene to resolve the differences between the two chambers' tax reform
bills, dropped the tax credit provision.
This was done with the assurance from Ways and Means Committee Chairman
Ullman, however, that he'd do everything he could to bring the issue to a House
vote, if the Senate added the provision to another bill.
The Senate did precisely this with an amendment to H.R. 1386. H.R.
1386 is a private relief bill for Smith College which passed the House last
May. The Senate amended the bill on September 16, 1976 with the tax credit
provision (explained above), requested a conference with the House to resolve
the differences, and appointed conferees. As of September 23, however, the
House has not appointed conferees.
If a conference is not convened, the tax credit provision (as well as
the Smith College relief) will die with the end of the 94th Congress.
FORD is LIBRARY GERALD
THE WHITE HOUSE
WASHINGTON
September 23, 1976
MEMORANDUM FOR:
MIKE DUVAL
FROM:
JACK MARSH
You may wish to show the President the attached
"Dear Colleague" letter in reference to the higher
education tax credit bill. This is the Roth Amend-
ment which was in the Senate bill and was dropped in
Conference on the big tax reform bill.
This has passed the Senate as an amendment to a
minor bill (Smith College Bill) and is now back in
the House.
Coughlin reports he believes the problem now is that
the measure is being stalled by a failure to appoint
conferees by the Speaker which is more fully set out
in the letter attached.
FORD is LIBRARY 03
LAWRENCE COUGHLIN
WASHINGTON OFFICE:
306 CANNON BUIL DING
13TH DISTRICT, PENNSYLVANIA
(202) 225-6111
DISTRICT OFFICE:
COMMITTEE ON
Congress of the United States
700 ONE MONTGOMERY PLAZA
APPROPRIATIONS
NORRISTOWN, PA. 19401
House of Representatives
(215) 277-4040
SUBCOMMITTEES:
596-1755
FOREIGN OPERATIONS
LEGISLATIVE
Mashington, D.C. 20515
September 23, 1976
FOR MEMBER'S IMMEDIATE ATTENTION
Dear Colleague:
I urgently ask your help in bringing higher education tax credit legisla-
tion to a House vote by asking the Speaker to appoint conferees for H.R. 1386 as
soon as possible.
On September 16, the Senate amended H.R. 1386, which passed the House last
Spring, to provide families with tax credits to offset their children's vocational
and higher education expenses. I have been informed, moreover, that when an identi-
cal amendment was dropped by the Tax Reform Act Conference Committee Ways and Means
Chairman Ullman assured the conferees of his efforts to bring the tax credit issue
to a full House vote in the 94th Congress. As of this time, the House has not ap-
pointed conferees to enable this.
All of us are familiar with the Senate's tax credit amendment. ^ family
would be able to reduce its 1977 tax bill by up to $100 for each child's vocational
or college education expenses. The amount of the credit would increase in $50 in-
crements annually until 1980.
Nearly four dozen Members, from both parties, have sponsored higher educa-
tion tax credit bills. Almost twice this number urged hearings on the tax credit
approach. The Senate has passed such legislation in four of the past five Con-.
gresses, including the 94th Congress. President Ford, himself, publicly endorsed
the tax credit approach to education. Despite this overwhelming bi-partisan support,
the full House has never had the opportunity to express its will.
I, therefore, earnestly enlist your assistance in urging action on this
legislation. It is the last chance for the 94th Congress to go on record on this
important issue. Regardless of our individual opinions on this particular Senate
amendment, I know you will agree to the importance of the issue itself.
Please, write, call, or otherwise relay to the Speaker your desire that con-
ferees for H.R. 1386 be appointed without delay. If you have any questions, or need
further information, please contact Chris of my staff at x56111.
Sincerely,
Sany
LAWRENCE COUGHLIN
FORD
LIBRARY
FACT SHEET ON TAX CREDITS FOR HIGHER EDUCATION EXPENSES
General:
Almost four dozen Congressmen have sponsored bills providing tax
credits for education costs.
Nearly twice that number urged Ways and Means Committee Chairman Ullman
to hold hearings on the tax credit approach. Hearings were never held.
The Senate has passed tax credit legislation in four of the past
five Congresses, including the 94th Congress. In each instance, the Senate
position was dropped in House-Senate Conferences.
What the present tax credit provision would do:
A family would be able to reduce its 1977 tax bill by up to $100
for each child's vocational or college education expenses. The amount
of the credit allowed would increase by $50 each year until 1980. The credit
would then be $250 per student.
Recent legislative history:
The Tax Reform Act was amended by the Senate to include the above
tax credit provision. The House-Senate Conference Committee, which had
to convene to resolve the differences between the two chambers' tax reform
bills, dropped the tax credit provision.
This was done with the assurance from Ways and Means Committee Chairman
Ullman, however, that he'd do everything he could to bring the issue to a House
vote, if the Senate added the provision to another bill.
The Senate did precisely this with an amendment to H.R. 1386. H.R.
1386 is a private relief bill for Smith College which passed the House last
May. The Senate amended the bill on September 16, 1976 with the tax credit
provision (explained above), requested a conference with the House to resolve
the differences, and appointed conferees. As of September 23, however, the
House has not appointed conferees.
If a conference is not convened, the tax credit provision (as well as
the Smith College relief) will die with the end of the 94th Congress.
FORD & GERALD LIBRARY