Archer Announces Details on
Savings and Investment Hearings

January 24, 25, 26, and 31

Congressman Bill Archer (R-TX), Chairman of the Committee on Ways and Means, today announced that the Committee will conduct hearings on January 24, 25, 26, and 31, 1995, on the tax provisions in the Contract with America designed to encourage greater savings and investment. The Committee will receive testimony on the proposed American Dream Savings Account provision in the American Dream Restoration Act and tax cuts in the Job Creation and Wage Act, which includes the proposed capital gains tax cut, neutral cost recovery, increased expensing for small businesses, increased estate tax unified credit, and improved home office deduction. The hearings will feature invited witnesses, Members of Congress, and public witnesses. All hearings will begin at 10:00 a.m., in the main Committee hearing room, 1100 Longworth House Office Building.

BACKGROUND

The American Dream Restoration Act would create a new personal savings vehicle, the American Dream Savings Account (the "ADS Account"), effective for tax years beginning in 1996. Individuals could make non-deductible contributions up to $2,000 (married couples could contribute up to $4,000) annually to an ADS Account and could rollover amounts from a regular deductible IRA into an ADS Account. Distributions from an ADS Account used for retirement, first-time home purchases, educational expenses, and medical expenses would receive favorable tax treatment. Current-law, deductible IRAs would be retained. The Job Creation and Wage Enhancement Act contains several proposals to encourage savings, investment, and entrepreneurship. First, the Act includes three capital gains incentives: (1) a 50 percent capital gains deduction, (2) index Indexation of capital gains basis to eliminate inflationary gains, and (3) a capital loss deduction for homeowners who sell their homes at a loss. The 50 percent capital gains deduction and the home sale capital loss provision would apply to sales on or after January 1, 1995, and the capital gains indexation ion would apply to inflation (and sales of assets) occurring after December 31, 1994. Second, the Act contains a "neutral cost recovery" proposal. Effective for eligible property placed in service on or after January 1, 1995, the proposal would increase depreciation deductions to approach the economic equivalent of expensing. Third, the Act would allow small businesses to "expense" (i.e. deduct in the year of purchase) up to $25,000 of property annually (current law limits expensing to $17,500). Fourth, the Act would phase in an increase in the estate and gift tax exemption to S70,000 and index the exemption. The current $600,000 exemption has not been increased in several years and has been eroded by inflation. Fifth, the Act would clarify the tax laws to allow greater deduction of expenses arising from a taxpayer's use of an office in his or ha home. Sixth, the Act would let taxpayers allocate up to 10 percent of their tax liability to a public debt reduction fund. The designated funds would be strictly earmarked for national debt reduction and would be enforced through automatic spending cuts.

Archer stated, "There is no question that we should provide greater incentives for people to save and invest. These provisions contained in the Contract with America will go far in helping people to achieve these goals."

WAYS AND MEANS COMMITTEE

DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:

Requests to be heard at the hearings must be made by telephone to Diane Kirkland, Traci Altman, or Richard Scott, (202) 225-1721 no later than the close of business, Thursday, January 12, 1995. The telephone request should be followed by a formal written request to Phillip D. Moseley, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. The staff of the Committee will notify by telephone those scheduled to appear as soon as possible after the filing deadline. Any questions concerning a scheduled appearance should be directed to the staff at (202) 225-1721.

ID view of the limited time available to hear witnesses, the Committee may not be able to accommodate all requests to be heard. Those persons and organizations not scheduled for an oral appearance are encouraged to submit written statements for the record of the hearing. All persons requesting to be heard, whether they are scheduled for oral testimony or not, will be notified as soon as possible after the filing deadline.

Witnesses scheduled to present oral testimony are are required to summarize briefly their written statements in no more than five minutes. THE FIVE MINUTE RULE WILL BE STRICTLY ENFORCED. The full written statement of each witness will be included in the printed record.

In order to assure the most productive use of the limited amount of time available to question witnesses, all witnesses scheduled to appear before the Committee are required to submit 300 copies of their prepared statements for review by Members prior to the hearing. Testimony should drove at the Committee office, room 1102 Longworth House Office Building, no later 48 hours before he rings.

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE

Any person or organization wishing to submit a written statement for the printed record of the hearing should submit at least six (6) copies of their statement by the close of business, Friday, February 3, 1995, to Phillip D. Moseley, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Committee office, room 1102 Longworth House Office Building, before the hearing begins.

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