Clint's Window: Rumors and Ramblings (6/2/97)

There's lots of talk about the new tax bill. Some of it might be true.

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s is true on the eve of any major tax bill, Washington is awash in rumors that cannot be deemed 100% reliable, but also cannot be completely ruled out. For what it’s worth, which might be very little, we thought we would pass this noise along, together with some of our reactions.

Senate congressional aides indicated that there is growing opposition within the Finance Committee to the Levin-McCain bill (S. 576) that would require that stock options for employees be treated in the same manner for tax purposes as for accounting purposes.

Interest in the stock option bill was piqued by a May 13 Wall Street Journal article that discussed the widespread use of stock options and how businesses compensate their top employees, not the rank-and-file, in a tax-advantaged manner.

The protests about the proposal from congressional aides could mean that opposition to the proposal is firm and that the measure will not be adopted, but they also easily could mean that the aides are protecting their bosses by in effect saying "don’t blame us if the proposal gets approved on the floor."

The Joint Tax Committee is dividing its work into a "now" and "later" piles.

Regardless of how the aides’ comments are interpreted, interested taxpayers should be aware the stock option proposal is receiving lots of attention on Capitol Hill.

Another interesting development is that Joint Committee on Taxation Chief of Staff Ken Kies and others have said they have begun putting their work into two piles -- one that must be taken care of immediately in the current budget bill and another that can wait for another legislative vehicle.

In effect, the staff is beginning to define the autumn agenda, which will include items such as tax reform, further international tax simplification, and a close look at partnerships. Partnership taxation was discussed in the JCT pamphlet dated April 8.

Items that are too complex or controversial to resolve quickly in June may be back in the fall. Some interest groups may be able to win temporary victories by getting action deferred on items they oppose. For taxpayers seeking to gain a benefit in the current bill, the definition of an autumn agenda brings the threat that their pet projects could be delayed.

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	Rumblings and Rumors Clint's Window by Clint Stretch, Director Tax Legislative Affairs, Deloitte & Touche LLP Monday, June 2 , 1997