Show 1 native 1 I r OUTLOOK FOIl n FEDE l CHANGES The House Ways and Means Committee Is now well wen into Its discussion of changes in the federal tax structure to become effective next January Theres There's strong sentiment within the committee for extending most of the concessions made in the tax reduction legislation passed earlier this year minus the income tax rebate Unless renewed most of these concessions con con- concessions cessions will expire at the close of 1975 Committee Rationale The committee seems likely to renew them for these reasons 1 Their lapse might delay or diminish the economic recovery 2 They are popular and would help make the rest of the tax reform package more palatable to Congress and to the public The new Ways and Means Committee has 37 members compared to an earlier 25 but it itis itis itis is not shaping up to be as avant- avant guarde as had been expected So far its decisions have been surprisingly tentative and decidedly more conservative than most observers had forecast when the committee was enlarged and its direction placed in the hands of Rep Al Ai D Ullman Oregon D.-Oregon This committee isn't likely to kick over the traces and come up with a dramatically liberal tax program far to the I left n of anything that emerged when it was chaired by Representative Wilbur Mills D. D.- Arkansas but it is expected to strike some kind of blow for the type of reform that will appease a Democratic majority which has taken pains to do a great deal of deploring of loopholes What Help For Business The nuts and bolts of provisions helpful to business haven't been put in place yet but a a measure of pro pro pro- business sent sentiment ment is is clearly 1 Ii evident in committee committee deliberations Theres There's increasing increasing increasing in in- creasing awareness among members that business must be helped if unemployment is to be reduced significantly during 1976 The Babson staff stare thinks the committee will eventually agree to vote in favor of reducing the levy now placed on capital gains and we do not rule out a committee e decision to recommend a sliding scale levy on these gains that would decline with length of the holding period Ways and Means is also leaning toward making permanent permanent per per- manent the 10 percent investment investment investment in in- vestment tax credit is generally sympathetic to business business' pleas for continuing current fast depreciation provisions in the tax code It may also recommend to the House a reduction of the tax on dividends which are reinvested But it will not go much beyond these items and final decision on some of them may be less helpful to business than now seems likely And For Small Business House louse Ways and Means leans Committee which is its sole writing tax-writing panel will also propose a boost in the surtax exemption for small business to and Congress will follow through But the new tax law will almost certainly make no changes in the estate estale tax setup Small business will have to press again next year for tax adjustments that will make it easier for heirs to family enterprises enterprises enterprises en en- to remain in business Small businesses will mil however have quite a good deal dealto deal dealto to gain on balance from whatever reductions are finally made on the capital gains tax rates and from Crom any additional flexibility extended in the area of depreciation allowances On The Minus Side It is too early to tell with preciseness what business may lose looe in the tax reform package now being ing shaped on Capitol II hilt Hill ill but several loopholes are being attacked and some are bound to be closed One such will be the shelter now available to domestic sales corporations DISCs via deferral of levies on foreign income ome But overall business can an count on gaining more than it loses when the tax package fj be becomes omes law |