December 15, 1992 MEMORANDUM TO
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This document is from the collections at the Dole Archives, University of Kansas http://dolearchives.ku.edu December 15, 1992 MEMORANDUM TO: SENATOR DOLE FROM: NINA OVIEDO#' SUBJECT: MISCELLANEOUS TAX COMMENTS AND TALKING POINTS The following are some miscellaneous tax comments and talking points for your business meetings. CLINTON ECONOMIC CONFERENCE • Clinton's first major public event of the transition, the "Economic Conference," began Monday, December 14 and will continue through Tuesday, in Little Rock. • Inevitably it's being billed as an economic summit but the fear of raising expectations has Governor Clinton calling the meeting a "retreat •.. a lot of work." • Originally, only one hundred business and labor leaders, and economists were expected to attend. In the end Clinton opened the doors and over 300 attended the forum. • It is reported that the basic Clinton economic program will include a top-bracket tax increase, tax breaks for the middle class, investment incentives, job training and short term public works spending and other steps to spur the economy and cut unemployment. • However, with signs of a recovering economy, it appears that Clinton may be reserving his flexibility on an immediate short term stimulus package. This became more obvious during yesterday's Conference meeting when Clinton seemed to emphasize that long term economic restructuring would be more important than short term fixes. ANTICIPATED ITC LEGISLATION • Fears that businesses may be def erring discretionary investments in capital goods until '93, prompted Chairmen Bentsen and Rostenkowski to issue a joint statement on the effective date of possible investment incentive legislation. • Consequently, they will recommend and support an effective date of December 4, 1992. It is reported that transition advisor, Robert Reich, indicated that the president-elect agrees with the proposed enactment date. 1 of 2 Page 1 of 82 This document is from the collections at the Dole Archives, University of Kansas http://dolearchives.ku.edu EXTENDERS • There has no word from either Chairmen on extenders. No doubt that some extenders will be included in a stimulus package -- for example, Clinton backs a permanent R&D. • The effective date on extenders -- whether retroactive or not -- will depend on revenue and administrative difficulties. With a retroactive date, some taxpayers may be faced with filing amended returns unless legislation can be enacted prior to March 15 -- the corporate filing date, or April 15 -- individual filing date. SMALL BUSINESS PROPOSAL • Secretary Brady recently released a small business tax reform initiative. It is aimed at reducing capital costs and administrative complexity for small businesses. • The initiative includes: (also, attached is the NFIB's response): • Increasing section 179 to $25,000 from $10,000. The NFIB supports this proposal because it allows small businesses to avoid complicated depreciation rules. • Permits the expensing of $2,500 of start-up expenditures. The NFIB supports this proposal because the section 179 expensing (above) only covers certain assets. This "start-up" provision will help with other expenses. • Provides relief from AMT. NFIB supports. • Simplifies inventory tax accounting rules. The NFIB would go further and instead of simplifying the rules would instead exempt small business from the accounting rules. (NFIB's suggestion may be going a bit too far; it would also be a matter of revenue loss.) • The NFIB also suggests: • a capital gains cut -- similar to the Bumpers' proposal we used in the last tax bill for enterprise zones. • a zero tax rate for the first $25,000 in small business earnings. • a simplified tax form. 2 of 2 Page 2 of 82 This document is from the collections at the Dole Archives, University of Kansas http://dolearchives.ku.edu NFIB National Federation of Independent Business MEMORANDUM TO: SHEILA BURKE FR: JOHN MOTLEY DT: DECEMBER 13, 1992 RE: NFIB 'S COMMENTS ON TREASURY'S SMALL BUSINESS TAX REFORM INITIATIVES Enclosed is a copy of NFIB 's plan for improving the lot of small business owners. You will see that it is very similar to Treasury's proposal. Expensing Section 179 expensing is very helpful to small business owners because it allows them to avoid complicated depreciation rules and just write off the cost of business expenses in the year incurred. One of the problems with expensing, however, is that it only applies to certain assets. The Treasury proposal recognizes this fact by allowing start-up businesses to write off an additional category of business expenses. This change would be extremely beneficial to small business owners. Alternative Minimum Tax NFIB agrees that small business owners should not be subject to the AMT. Suite 700 For the small business community, the cost of complying with the AMT almost 600 Maryland Ave. S.W. certainly Washington, DC 20024 outweighs the amount of revenue collected. (202) 554-9000 Direct Line (202) 554-0822 Accounting Changes Fax (202) 554-0496 Although NFIB supports the accounting changes in the Treasury proposal, we encourage you to take a slightly different approach. Accrual accounting, LIFO, FIFO, the completed contract method of accounting, and the uniform capitalization rules should not apply to small business owners. NFIB supports allowing all small business owners to use cash accounting. The Guardian of Small Business Page 3 of 82 This document is from the collections at the Dole Archives, University of Kansas http://dolearchives.ku.edu Suggested Additions to the Treasury Proposal Small businesses would also greatly benefit from-- * a capital gains cut similar to Senator Bumpers' seed capital proposal; * a zero rate for the first $25,000 in corporate earnings; * simple S corporation rules; and * a simplified tax form. Page 4 of 82 DEC 15 ' 92 12 : 59 No . 002 P. 03 BOB DOLE ThisID document: 202-408 is from the- 5 collections11 7 at the Dole Archives, University of Kansas http://dolearchives.ku.edu 1' PAGE TWO j 12s20 PM Ar. Don Marron•s Office Paine Webber 1285 Avenue of the Americas - 14th Floor 212/713-2105 (Elaine Conte, Secretary) 12:30 PM Proceed to 3Bth Floor ATTEND LUNCHEON MEETING -- 38th Floor ATTENDEES: Linda Wachner - Warnaco George Klein - Park Tower Realty Ezra Zolkha - Zolkha & Assocs. investments Dick Voell -- Rockefeller organizations John "Jack° Kennedy - CEO, Federal Paper Boa.rd co. Charles Jones - Chairman, Farrell Corp. Paul Gunther - President, Paine Webber Don Marron - Paine Webber CONTACT: Chris Manion 212/713-2865 AFTERNOON FREE RON: Waldorf Astoria Tburado.y, December 17 8110 AM Lv. Waldorf Astoria DRIVER: Fortune Limousine co. 8:30 AM Breaktaat Meeting Sky Club Met Life Bldg. 200 Park Avenue - 56th Floor 212/867-9550 CONTACT: Ken Langone (Secretary: Beth Nelson or Pam Goldman) 212/421-2500 ATTENDEES: Adam Arnott - X-Air of New York Arthur Bahr - G~ Investment Corp. Vincent Banker - Alex Brown Frank Cahouet - Mellon Bank Arthur Calcognini - Lombard World Trade John Catsimatidis - Red Apple companies Patricia Chadwick - Chancellor capital Mgmt. Ronald Clark - Allianz Investment Peter Crisp - Venrock Assocs, Page 5 of 82 BOB DOLE This documentID : 202-408-5 is from the collections117 at the Dole Archives,DEC University 15'92 of Kansas 12 : 59 No . 002 P . 0 4 http://dolearchives.ku.edu PAGE THREE ATTENDEES (CONTINUED): Joseph OiMartino - Dreyfus Corp. Stanley Druckenmiller - Soros Fund Mgmt. Group Nonuan Eig - Lazard Freres Dale Fr~y - GE Investment Corp. William Harnisch - Forstmann-Leff Michael Hoben - Benefit capital Mgmt. Frank Houghton - Lynch & Mayer Carl Jones - Invemed Assocs. William Kearns - Shearson Lehman Cristina Kepner - Invemed Assoos. Xenneth Langone - Invemed Assoos. David Marks - Allianz Investment John Myers - GE Investment Corp. Edwin McAmis - Skadden, Arps, Meagher Slate & Flom Edward Rappa - RW Pressprich & co. Dan Sullivan - Saeoo Capital George O'Neill - Merriweather Capital Julian Robertson - Tiger Management Corp. David Schafer - Schafer Capital Mgmt. Andrew Taussig - Frist Boston crop. Thomas Teague - Salem Nationalease Peter Vlachos - Austin Investment Mgmt. Matt Wanning - Red Apple Companies 10:30 AM Ar. Links Club 36 East 62nd Street 212/838-8181 MET BY: Tom Foley COFFEE/MEETING WITH TOM FOLEY Other Attendees: Charlie Glazer - GOP Fundraiser ~rom CT, personal friend of Tom's Scott Frantt - young wealthy Republican with history of large donations CONTACT: Tom Foley 203/862-2850 11:30 AM Lv. Links Club 12:15 PM Ar. Teterboro, N.J. Atlantic Aviation 201/288-1740 Page 6 of 82 15'92 13:00 No.002 P.05 BOB DOLE This documentID:202-408-5117 is from the collections at the Dole Archives,DEC University of Kansas http://dolearchives.ku.edu j , 1 PAGE l1'0UR I 12:20 PM Lv. New York (Teterboro) AIRCRAFT: NTC Falcon 10 TAIL NO.: N 101 TF MANIFEST: Senator Dole Mark Miller PILOTI Dwain Gadway CO-PILOT: Frank Leskauskas MEAL SERVICE: Lunch CONTACT: Dwain G~dway 914/462-6206 1:20 PM Ar. Washington National Signature Flight support 703/549-8340 MET BY: Wilbert lZ40 PM Ar. S-230 Page 7 of 82 This document is from the collections at the Dole Archives, University of Kansas http://dolearchives.ku.edu December 15, 1992 MEMORANDUM TO: SENATOR DOLE FROM: NINA OVIED ~ SUBJECT: MAURICE "HANK" GREENBERG -- JAPAN REINSURANCE ISSUE You are scheduled to attend a breakfast meeting Wednesday, December 16, 1992. Hank Greenberg, Chairman, American International Group (AIG) will be attending. Bob Lighthizer represents AIG. You along with Senator Mitchell recently wrote Secretary Brady and Ambassador Hills regarding a proposed change in the Japanese tax law that could drive U.S. insurance companies out of the Japanese market. That letter prompted discussions by the Administration with the Japanese Ministry of Finance ("MOF"). According to Bob, the letter was instrumental in halting the proposed changes by the Japanese. No doubt that Hank will want to thank you for your efforts. Attached is a copy of the letter you wrote to the Secretary. Page 8 of 82 This document is from the collections at the Dole Archives, University of Kansas http://dolearchives.ku.edu ~nited ~rates ~enate WASHINGTON, DC 20510 : .