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Quick Conference on Small Business Tax Bill Anticipated

Tuesday, July 30, 1996

OnLine

The House-Senate conference on the small business tax bill (HR 3448) will convene this afternoon and the conferees are expected to quickly reach an agreement on the tax issues, congressional sources predicted.

Under the still-developing plan, the House conferees are expected to offer amendments to the Senate-passed version of the bill, then the Senate will make a counter-offer, which the House may accept, sources said. If this scenario comes true, the conference could complete its work today and the conference agreement would be voted on Thursday or Friday.

The bill’s two versions start with the same core--increasing the expensing limitation for small businesses and offsetting it with a phase-out of the possessions tax credit--but the Senate went several steps further than the House by extending expired tax breaks and expired aviation taxes, and by including a variety of other reform items.

The conferees on the health insurance reform bill (S. 1028, HR 3103) also are continuing to meet though they appear, at least for the moment, to have reached an impasse over language addressing the portability of health insurance benefits.

The health insurance bill contains several tax-related provisions, including a medical savings account pilot program, an increase in the health insurance deduction for the self-employed, a change in the treatment of bad debt reserves of thrifts, and expatriation provisions.

Though the health reform and the small business tax bill for the most part have been de-coupled politically, no one has completely ruled out the possibility that the small business tax bill could be held hostage if an agreement is not reached on the health reform bill.