GOP Senators Meeting Regarding Unemployment, November 6, 1991

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Extent (Dublin Core)

11 Pages

File Name (Dublin Core)

lead_401_046_all

Title (Dublin Core)

GOP Senators Meeting Regarding Unemployment, November 6, 1991

Date (Dublin Core)

1991-11-06

Date Created (Dublin Core)

1991-11-06

Congress (Dublin Core)

102nd (1991-1993)

Policy Area (Curation)

Labor and Employment

Creator (Dublin Core)

Dole, Robert J., 1923-2021

Record Type (Dublin Core)

reports

Rights (Dublin Core)

http://rightsstatements.org/vocab/CNE/1.0/

Language (Dublin Core)

eng

Collection Finding Aid (Dublin Core)

https://dolearchivecollections.ku.edu/index.php?p=collections/findingaid&id=26&q=

Physical Location (Dublin Core)

Collection 007, Box 401, Folder 46

Institution (Dublin Core)

Robert J. Dole Institute of Politics, University of Kansas, Lawrence, KS

Archival Collection (Dublin Core)

Robert J. Dole Republican Leadership Collection, 1985-1996

Full Text (Extract Text)

BOB DOLE
KANSAS
United States Senate
OFFICE OF THE REPUBLICAN LEADER
WASHINGTON, DC 20510-7020
(Rest of page handwritten)
4:15 meeting
nov. 6, 1991

Dana
Dole
Packwood
Durenberger
Chafee
Chandler
Grandy
Johnson
Shaw
McGrath
Vander Jagt
Bunning
Arche
(Crossed out: illegible)
Schulze
Gradion
Sunquist
Thomas

GOP Finance and Ways + Means

(End page 1)

Possible Option for Unemployment Package
(in millions of dollars)
Years

Provisions
1992
1993
1994
1995
1996
1992-96

Revenues

Improved Estimated Tax
2400
0
0
0
0
2400
Debt Collection
1100
160
160
160
160
1740
GSL
15
25
25
25
25
115
Totals
3515
185
185
185
185
4255

Benefits

Emergency UI
3480
0
0
0
0
3480
Military
20
20
20
25
25
110
Total
3500
20
20
25
25
3590

Deficit Impact
-15
-165
-165
-160
-160
-665

Program Parameters:
Benefits: 3 tiers of 6/12/18 weeks.
Duration: November 17, 1991- June 6, 1992
Reachback: March 8, 1991
(End page 2)

(Underlined: Possible Financing Options)
(Underlined: Revenue From Changes in Estimated Income Tax Payments: )
Generally, prohibits an individual taxpayer from using the 100% of last year's liability safe harbor if the taxpayer has a tax liability safe harbor if the taxpayer has a tax liability in the current year that exceeds the taxpayer's tax liability in the prior year by more than $10,000 ($5,000 in the case of a separate return by a married individual). This base proposal raises #3.2 billion, however, the following six exemptions/ safe harbors would apply for a nety revenue increase of $2.4 billion:
Pass-through Entities. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include tax attributable to any income exceeding prior year's income from estates, trusts, or pass-through entities (i.e., partnerships, S corporations, limited liability companies, regulated investment companies, REITs, and REMICs) .
Explanation
Most pass-through entities are not required to provide tax information until after the close of the taxpayer's taxable year. For example, partnerships generally are not required to provide partners with tax information until April 15th of the following year. In such instances, partners and other holders of pass-through interests may have no way of accurately estimating current year income.
The provision would permit taxpayers to ignore increases in income from pass-through entities when they determine whether they have a $10,000 increase in tax. In the event a holder of a pass-through interest has a $10,000 increase in tax liability attributable to sources other than a pass-through entity, the taxpayer would count income from the pass-through entity from the previous year (rather than from the current year) in calculating 90% of current year tax liability.
Revenue Estimate: Loss of $.3 billion against the base proposal
Involuntary Conversions. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include any tax attributable to an involuntary conversion.

Explanation
Upon certain involuntary conversions (i.e., destruction of a property by fire, drought, flooding, etc.), the taxpayer is
(End page 3)
permitted to use insurance or similar proceeds to replace the destroyed property. Generally, no gain is recognized, provided that the property is replaced within 2 years of the conversion. If the taxpayer fails to replace the property within the 2 year period, gain is recognized as of the date of the conversion.
This provision would exclude from the determination of whether there has been a $10,000 increase in tax, any income attributable to an involuntary conversion.
Revenue Estimate: Negligible loss against the base proposal
Principal Residence. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include any tax attributable to the sale of the taxpayer's principal residence.
Revenue Estimate: Loss of $.3 billion against the base proposal
Sale of Closely-Held Business. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include tax attributable the sale of any interest in a closely-held business (i.e., one in which 50% or more of the interests are owned by 5 or fewer persons) .
Revenue Estimate: Loss of $.1 billion against the base proposal

Persons Not Previously Filing Estimated Taxes. Retain current law (i.e., retain the 100% of prior year's tax estimated tax safe harbor) for persons not required (without regard to this amendment) to pay estimated taxes (because of adequate wage or other withholding or because of lack of tax liability) in any of the four prior years.
Revenue Estimate: Loss of $.1 billion against the base proposal
Overpaid Estimated Tax Installments. In determining whether a taxpayer has met the required payment for a quarter, overpayments for prior quarters shall be applied with an interest factor equal to the overpayment rate.
Revenue Estimate: Negligible loss against the base proposal

B. Other Revenues/Offsets
1. Debt Collection. Extension of expiring tax provision would permanently extend the IRS tax refund offset program which allows the IRS to reduce the amount of any Federal refund due taxpayers by the amount of debt owed and pay that amount to the Federal agency owed.
Revenue Estimate: $1.1 billion in 1992, $1.74 billion over five years
(End page 4)

2. GSL Reforms. Guaranteed student loan reforms: would establish enhanced collection and default management activities, including credit checks on borrowers over age 21; provide the Secretary the authority to obtain information from other government agencies concerning the most recent address of a student borrower; and require borrowers to provide identifying information at the time of loan application and exit from a school.
Revenue Estimate: $.015 billion in 1992, $.115 billion over five years
3. Military. Expands benefit eligibility for ex-servicemembers who are involuntarily separated from the Armed Forces or who have been extended beyond their regular separation date. Benefit eligibility is equivalent to that of civilians who experience involuntary job loss: 26 weeks of regular benefits after a 1-week wait.
Current law provides for 13 weeks of benefits after a 4-week wait for all ex-servicemembers. Voluntarily separated ex-servicemembers would retain eligibility for current-law benefits.
In addition, reservists serving in Desert Storm need only 90 days (rather than current 180 days) of active duty to quality.
Revenue Estimate: $.1 billion in 1992, $.535 billion over five years
(End Page 5)

Possible Benefits Option
Temporary Extended Benefits Program in effect from November 17, 1991 to June 6, 1992:
The package has four parts:
1. Tier 1: Basic 6 Weeks. Qualified workers in every state would be eligible for at least 6 additional weeks of benefits.
2. Tier 2: 12 Weeks. States that had either a 4% Adjusted Insured Unemployment Rate (AIUR) and/or a 33% benefit exhaustion rate for insured unemployed workers would get 12 additional weeks of benefits.
States that would get 12 weeks of benefits: AZ, CA, CO, CT, IL, MD, MA, MI, NM, ND, OR, PA, VT, WA, WV
3. Tier 3: 18 Weeks. States that had a 43% benefit exhaustion rate for insured unemployed workers would get 18 additional weeks of benefits.
States that would get 18 weeks of benefits: AK, DC, FL, ME, NJ, NY, PR, RI, TX
4. Reach Back Provision: Qualified unemployed workers whose regular unemployment benefits ended between March 8 and the date this program begins would be eligible for additional benefits if they live in Tier 2 or Tier 3 states. Qualified workers in Tier 2 states get 12 additional weeks; those in Tier 3 states get 18 additional weeks. The weeks of benefits received under these reachback provisions are reduced by the number of weeks of benefits a given worker has already received under the regular Extended Benefits program.
Cost Estimate: First year outlays of $3.480 billion
(End Page 6)

Possible Option for Unemployment Package
(in millions of dollars)
Years

Provisions
1992
1993
1994
1995
1996
1992-96

Revenues

Improved Estimated Tax
2400
0
0
0
0
2400
Debt Collection
1100
160
160
160
160
1740
GSL
15
25
25
25
25
115
Totals
3515
185
185
185
185
4255

Benefits

Emergency UI
3480
0
0
0
0
3480
Military
20
20
20
25
25
110
Total
3500
20
20
25
25
3590

Deficit Impact
-15
-165
-165
-160
-160
-665

Program Parameters:
Benefits: 3 tiers of 6/12/18 weeks.
Duration: November 17, 1991- June 6, 1992
Reachback: March 8, 1991
(End page 7)

(Underlined: Possible Financing Options)
(Underlined: Revenue From Changes in Estimated Income Tax Payments: )
Generally, prohibits an individual taxpayer from using the 100% of last year's liability safe harbor if the taxpayer has a tax liability safe harbor if the taxpayer has a tax liability in the current year that exceeds the taxpayer's tax liability in the prior year by more than $10,000 ($5,000 in the case of a separate return by a married individual). This base proposal raises #3.2 billion, however, the following six exemptions/ safe harbors would apply for a nety revenue increase of $2.4 billion:
Pass-through Entities. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include tax attributable to any income exceeding prior year's income from estates, trusts, or pass-through entities (i.e., partnerships, S corporations, limited liability companies, regulated investment companies, REITs, and REMICs) .
Explanation
Most pass-through entities are not required to provide tax information until after the close of the taxpayer's taxable year. For example, partnerships generally are not required to provide partners with tax information until April 15th of the following year. In such instances, partners and other holders of pass-through interests may have no way of accurately estimating current year income.
The provision would permit taxpayers to ignore increases in income from pass-through entities when they determine whether they have a $10,000 increase in tax. In the event a holder of a pass-through interest has a $10,000 increase in tax liability attributable to sources other than a pass-through entity, the taxpayer would count income from the pass-through entity from the previous year (rather than from the current year) in calculating 90% of current year tax liability.
Revenue Estimate: Loss of $.3 billion against the base proposal
Involuntary Conversions. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include any tax attributable to an involuntary conversion.

Explanation
Upon certain involuntary conversions (i.e., destruction of a property by fire, drought, flooding, etc.), the taxpayer is
(End page 8)
permitted to use insurance or similar proceeds to replace the destroyed property. Generally, no gain is recognized, provided that the property is replaced within 2 years of the conversion. If the taxpayer fails to replace the property within the 2 year period, gain is recognized as of the date of the conversion.
This provision would exclude from the determination of whether there has been a $10,000 increase in tax, any income attributable to an involuntary conversion.
Revenue Estimate: Negligible loss against the base proposal
Principal Residence. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include any tax attributable to the sale of the taxpayer's principal residence.
Revenue Estimate: Loss of $.3 billion against the base proposal
Sale of Closely-Held Business. In determining whether a taxpayer has a $10,000 increase in tax from one year to the next (so as to preclude using the 100% of last year's tax estimated tax safe harbor), do not include tax attributable the sale of any interest in a closely-held business (i.e., one in which 50% or more of the interests are owned by 5 or fewer persons) .
Revenue Estimate: Loss of $.1 billion against the base proposal

Persons Not Previously Filing Estimated Taxes. Retain current law (i.e., retain the 100% of prior year's tax estimated tax safe harbor) for persons not required (without regard to this amendment) to pay estimated taxes (because of adequate wage or other withholding or because of lack of tax liability) in any of the four prior years.
Revenue Estimate: Loss of $.1 billion against the base proposal
Overpaid Estimated Tax Installments. In determining whether a taxpayer has met the required payment for a quarter, overpayments for prior quarters shall be applied with an interest factor equal to the overpayment rate.
Revenue Estimate: Negligible loss against the base proposal

B. Other Revenues/Offsets
1. Debt Collection. Extension of expiring tax provision would permanently extend the IRS tax refund offset program which allows the IRS to reduce the amount of any Federal refund due taxpayers by the amount of debt owed and pay that amount to the Federal agency owed.
Revenue Estimate: $1.1 billion in 1992, $1.74 billion over five years
(End page 9)

2. GSL Reforms. Guaranteed student loan reforms: would establish enhanced collection and default management activities, including credit checks on borrowers over age 21; provide the Secretary the authority to obtain information from other government agencies concerning the most recent address of a student borrower; and require borrowers to provide identifying information at the time of loan application and exit from a school.
Revenue Estimate: $.015 billion in 1992, $.115 billion over five years
3. Military. Expands benefit eligibility for ex-servicemembers who are involuntarily separated from the Armed Forces or who have been extended beyond their regular separation date. Benefit eligibility is equivalent to that of civilians who experience involuntary job loss: 26 weeks of regular benefits after a 1-week wait.
Current law provides for 13 weeks of benefits after a 4-week wait for all ex-servicemembers. Voluntarily separated ex-servicemembers would retain eligibility for current-law benefits.
In addition, reservists serving in Desert Storm need only 90 days (rather than current 180 days) of active duty to quality.
Revenue Estimate: $.1 billion in 1992, $.535 billion over five years
(End Page 10)

Possible Benefits Option
Temporary Extended Benefits Program in effect from November 17, 1991 to June 6, 1992:
The package has four parts:
1. Tier 1: Basic 6 Weeks. Qualified workers in every state would be eligible for at least 6 additional weeks of benefits.
2. Tier 2: 12 Weeks. States that had either a 4% Adjusted Insured Unemployment Rate (AIUR) and/or a 33% benefit exhaustion rate for insured unemployed workers would get 12 additional weeks of benefits.
States that would get 12 weeks of benefits: AZ, CA, CO, CT, IL, MD, MA, MI, NM, ND, OR, PA, VT, WA, WV
3. Tier 3: 18 Weeks. States that had a 43% benefit exhaustion rate for insured unemployed workers would get 18 additional weeks of benefits.
States that would get 18 weeks of benefits: AK, DC, FL, ME, NJ, NY, PR, RI, TX
4. Reach Back Provision: Qualified unemployed workers whose regular unemployment benefits ended between March 8 and the date this program begins would be eligible for additional benefits if they live in Tier 2 or Tier 3 states. Qualified workers in Tier 2 states get 12 additional weeks; those in Tier 3 states get 18 additional weeks. The weeks of benefits received under these reachback provisions are reduced by the number of weeks of benefits a given worker has already received under the regular Extended Benefits program.
Cost Estimate: First year outlays of $3.480 billion
(End Page 11)

GOP Senators Meeting Regarding Unemployment, November 6, 1991

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