legislation: 95-s-3420
Data license: Public Domain (U.S. Government data) · Data source: Federal Register API & Regulations.gov API
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| 95-s-3420 | 95 | s | 3420 | Revenue Act | Taxation | 1978-08-16 | 1978-08-16 | Referred to Senate Committee on Finance. | Senate | Sen. Hathaway, William D. [D-ME] | ME | D | H000346 | 0 | Revenue Act - Title I: Short Title, Etc. - Entitles this Act the "Revenue Act of 1978" and provides that amendments made by this Act shall apply to taxable years beginning after December 31, 1978. Title II: Tax Treatment of Individuals - Amends the Internal Revenue Code to reduce income taxes for individuals and trusts and estates. Increases the minimum income levels at which individuals are required to file tax returns. Eliminates deductions for personal exemptions and the general tax credit. Establishes a $275 personal tax credit for a taxpayer, spouse and dependents, and additional credits if the taxpayer or spouse is blind or has attained age 65. Revises requirements for the withholding of income tax to reflect the substitution of the personal tax credit for personal exemptions. Lowers from 65 to 55 the age requirement for the exclusion of gain on the sale or exchange of the taxpayer's principal residence. Eliminates the $35,000 ceiling on the adjusted sales price of a principal residence for purposes of computing the amount of gain excludable. Exempts gain from the sale or exchange of a principal residence from the minimum tax. Allows a tax credit equal to 50 percent of the State and local real property taxes paid by a taxpayer on his principal residence in a taxable year. Limits the credit to $1,000 for a taxable year. Increases the allowable amount of the earned income credit. Eliminates the requirement that an individual maintain a household in the United States to be eligible for the earned income credit. Requires employers to make advance payments of the earned income credit to employees certified as qualifying for the credit during the current year. Treats payment of this advance credit as payment of the employer's FICA and withholding amounts, and treats failure to make advance payments as a failure to deduct and withhold FICA amounts when they would otherwise be due. Provides that any amount refunded to an individual as an earned income credit shall not be treated as income for purposes of State taxation and shall be disregarded in determining eligibility for a federally funded public assistance program. Makes the earned income credit permanent. Allows a ten percent tax credit for purchase of stock in a corporation with an equity capital of less than $25,000,000. Limits the amount of such credit to $750 for a taxable year. Extends to 24 months the time period during which a personal residence must be held to qualify for nonrecognition of the gain from its sale or exchange when the gain is reinvested in a personal residence. Title III: Tax Treatment of Business - Revises the normal tax on corporate income to provide a 20 percent tax on income less than $150,000. Increases the surtax exemption to $150,000. Makes permanent the ten percent investment tax credit and the $100,000 limitation on used property eligible for the credit. Provides that the first $25,000 of an investment tax credit shall be refundable. Limits the allowable credit to the greater of $25,000 or 90 percent of the tax liability for the taxable year. Repeals the provisions permitting a taxpayer to carryback excess credit to the three preceeding taxable years. Extends the investment tax credit to the rehabilitation of certain buildings and their structural components. Increases the investment tax credit for pollution control facilities and expenditures for research and experimentation in connection with a trade or business. Increases from 10 to 15 the number of shareholders a small business may have without losing Subchapter S corporate status. Treats a husband and wife owning stock in a Subchapter S corporation as one stockholder for purposes of determining the number of stockholders in such a corporation. Permits the grantor of a trust and current income trusts to qualify as shareholders in a Subchapter S corporation. Sets forth new rules for making a Subchapter S election and for terminating or revoking such an election. Increases the amount of allowable first year additional depreciation for small business property to 25 percent of the first $20,000 of such property ($40,000 for married individuals filing joint tax returns). Limits eligibility for such depreciation allowance to those taxpayers whose depreciable property has an aggregate adjusted basis of less than $1,000,000. Increases to $50,000 ($100,000 for married individuals filing joint tax returns) the amount of loss on small business corporation stock which may be treated as ordinary, rather than capital loss. Extends for three years provisions authorizing depreciation of expenditures to rehabilitate low-income rental housing. Title IV: Tax Impact Study - Authorizes the Secretary of the Treasury and the Council of Economic Advisers to study the impact of Federal, State, and local government taxation on the American economy and to submit their findings to Congress by January 31, 1980. | 2025-09-02T17:14:29Z |