TAX TawFOUNDATION

TAX FEATURESJanuary 1994 Volume 3t Number 1

State T Coll o

p 4.9 Percent inTax Receipts

Nearly Two Ti sFast tbar .~ s s l 11 s

States increased total tax collections aninflation-adjusted 4 .9 percent from FY 1992 toFY 1993, according to a new study by the Tax

Foundation, constituting the largest annua lincrease in state tax receipts since 1985 (seeCharts 1 and 4).

In his latest Special Report, titled "StateTax Rates and Collections in 1993," Dr. ArthurHall notes that from FY 1992 to FY 1993 stat etax collections grew 3 .7 percentage points (or1 .7 times) faster than personal income . Incomparison, between 1983 and 1993 state taxcollections grew at an inflation-adjusted annualaverage of 1 .1 percentage points (or 1 .4 times)faster than personal income .

Between 1992 and 1993, Alaska (a specia lcase because of oil drilling) saw the highest taxgrowth relative to personal income growth ,followed by Mississippi, Colorado, NorthDakota, and Tennessee. In contrast, Nebraska,Idaho, Pennsylvania, West Virginia andMontana constitute the top five states wher epersonal income grew faster than stat etaxation . If Washington, D.C., were a state, itwould rank third, ahead of Pennsylvania . SeeChart 2 . )

Among those state taxes and fees that sawthe fastest revenue growth between 1992 and1993 were property taxes (22.7 percen tgrowth), corporate income taxes (13 percent) ,public utility taxes (12 .8 percent), severancetaxes (10.9 percent), and license fees (10 .6percent) . In contrast, state collections from

State Tax Rates continued on page 2

Chart 1State Tax Collections 1983-1993 ,

Current and Constant (1983) Dollars

$40 0

$350

$15 0

$10 0

$50

–CO )4- CO CO Co CO CO

0 m mm m m m 0) Co m rn rn rn rn

0 Current $

0 Constant (1983) $

Source : Tax Foundation .

0

at

$30 0

$25 0

$200

Capital •Prescription for EconomicGro

d Deficit ReductionRep. David Dreier (R-Calif.)

4-5

2

1993 State T CollectionsState Tax Rates

Continued from page 1

insurance-premium taxes (1 .3 per-cent), tobacco taxes (1 .9 percent), an dalcohol taxes (3 .7 percent) saw theleast amount of growth .

In FY 1993, almost a third of stat etax collections (32 .3 percent) camefrom general sales and use taxes, andanother third (31 .9 percent) stemmedfrom individual income taxes . Otherssources of state tax receipts in 1993included corporate income taxes (6 . 8percent of the total), licenses (6 . 7percent), and motor fuels taxes (6 . 6percent) . All other taxes accounted fo r15 .7 percent of receipts . (See Chart3.)

In addition to showing the growthin total tax collections, Dr . Hall offers asnapshot of changes in variou sstatutory tax rates for the 50 states an dthe District of Columbia . Most changesin 1993 were aimed at cigarettes andgasoline : 16 states increased their tax

rate on cigarettes (Montana decreasedits rate) and 13 states increased theirtax rate on gas . But while this contin-ues a trend among states to try toextract increasing amounts of revenuefrom the consumption of these twocommodities, actual revenue fro mcigarette and gasoline excise taxe shave shown relatively slow growt hcompared to other types of taxes .

In 1994, only Ohio appears likelyto seek new revenue by raisin gpersonal income tax rates, adding atop rate of 7 .5 percent to its previou stop rate of 6 .9 per-cent. Missouri maybe the only state seek-ing new revenueby increasing its statu-tort' corporat eincome tax rate, raising the top rat efrom 5 to 6 .25 percent .

The following states can lay claimto the highest tax rates this year:• Individual income tax : Californiaand Montana, with top rates of 1 1percent . (Massachusetts has a 5 .95

Slate Tax Rates continued on page 3

Chart 2Average Annual State Tax Growt h

vs. Personal Income Growth1992-1993

Taxes* Tax BurdenRelative to Pe r

Personal Income Househol dAlabama 6 .8% $ 3,09 7Alaska 38 .1 11,22 3Arizona 6 .5 3,68 9Arkansas 3 .1 3,28 5California 2 .0 4,45 1Colorado 22 .9 3,41 7Connecticut 7 .4 5,39 3Delaware 1 .0 5,47 1Dist. of Col . -4 .5 10,45 6Florida 6 .2 2,96 5Georgia 4 .6 3,22 5Hawaii -1 .8 7,55 9Idaho -5 .3 3,84 0Illinois -1 .0 3,30 8Indiana 1 .9 3,32 5Iowa 6 .9 3,78 2Kansas 12.7 3,43 3Kentucky -0 .7 3,75 5Louisiana -0 .4 2,89 8Maine 1 .0 3,59 3Maryland 6.8 3,95 7Massachusetts 1 .0 4,49 9Michigan -0 .9 3,36 2Minnesota 4.2 4,884Mississippi 26.8 3,554Missouri 8.6 2,89 1Montana -3.3 3,123Nebraska -8.1 2,995Nevada 2.4 3,994New Hampshire 2.6 2,103New Jersey -1 .7 4,638New Mexico 5.1 4,399New York 1 .3 4,750North Carolina -3.3 3,509North Dakota 13.9 3,725Ohio 3.0 3,135Oklahoma 4.8 3,450Oregon 0.1 3,137Pennsylvania -4.1 3,587Rhode Island 4.5 3,559South Carolina 1 .7 3,192South Dakota 4.6 2,386Tennessee 13.8 2,848Texas 0.5 2,841Utah 2.8 3,936Vermont -2.2 3,585Virginia -1 .9 3,024Washington -1 .5 4,526West Virginia -4.0 3,475Wisconsin 7 .0 4,200Wyoming 4 .7 4,241State Average 3 .7% $3,737

* Percentage change in tax receipts les spercentage change in personal income.

Source : Tax Foundation .

Chart 3Distribution of State Tax Collections by Source

(Fiscal Year 1993)

All Othe r15 .7%

Individual Incom e31 .9 %

Source : Tax Foundation .

General Sales & Us e32.3%

3

kground Pap Published.

o

The taxation of business hedginghas been a contentious issue for si xdecades, but Congress now has aunique opportunity to resolve theexisting tax problems inherent in theInternal Revenue Code, according to anew monograph written by TaxFoundation Special Tax Counsel J .Dwight Evans .

Mr. Evans, formerly AssistantGeneral Counsel for Mobil Corporation ,notes in his analysis that the initia lproblems started in 1934 when Con-gress, in changing the definition of"capital asset," failed to deal with a basicquestion: Are gains or losses realized ina hedging transaction considere d"capital" or "ordinary" in character?"The answer to this income tax ques-tion is vitally important in realizing th eeconomic objective of the businesshedge to manage business risks," saysMr . Evans .

As explained in the monograph-titled "A Critical Analysis of the Taxationof Business Hedging and the Case forComprehensive Legislation"-a hedgeinvolves a counterbalancing transactio ndesigned to reduce or eliminate the ris kof loss in another business transaction .The income from this underlyingbusiness transaction is taxed as ordinarygain or loss . For the business hedge toaccomplish its counterbalancing objec-tive after tax, says Mr . Evans, the gain o rloss from the hedge should likewise beordinary in character . "Otherwise theremay be a mismatch in tax resultsbecause, under the provisions of th eInternal Revenue Code, while ordinaryloss is currently deductible from ordinar yincome, capital loss-with limite dexceptions-can only be deducted fromcapital gain . "

After the Supreme Courts's decisionin Arkansas Best in 1988, the IRS

adopted a narrow interpretation anddisallowed ordinary tax treatment formany hedges, frustrating the economi cobjective of such transactions . The IRSposition was rejected by the U .S . TaxCourt in 1993, further confusing thecase .

With this in mind, the TreasuryDepartment has issued proposed an dtemporary regulations resolving many-"but concededly not all," says Mr .Evans-of the outstanding issues . I tappears that under the present provision sof the Code, the Treasury Departmen tprobably cannot resolve these remainin gissues without legislative action .

This offers Congress a "uniqueopportunity at this time . . . to holdhearings and to enact a comprehensivestatutory system for the taxation of th ebusiness hedge which fully resolve sexisting tax problems inherent in theCode," concludes Mr . Evans . •

State Tax Rates

Continued from page 2

percent rate, but levies a 12 percen trate on interest, net capital gains ,dividends for state residents, and stat ebusiness income earned by nonresi-dents .)• Corporate income tax : Pennsylvania ,with a single rate of 12 .25 percent .• General sales tax : Rhode Island,

Nevada, Mississippi, with a rate of 7percent .• Gas tax: Connecticut, with a levy of294 per gallon.• Cigarette tax : Hawaii, with a levy o f604 per pack. (Washington, D .C., ha sa levy of 65( per pack . )

Based on state revenue collec-tions, Alaskans have the highestaverage state tax burden per house-hold, at $11,223, followed by Hawaii

($7,559), Delaware ($5,471), Con-necticut ($5,393), and Minnesot a($4,884). If Washington, D .C., were astate, it would rank second, with aper household tax burden of $10,456 .Residents of New Hampshire havethe lowest average state tax burdenper household, at $2,103, followedby South Dakota ($2,386), Texas($2,841), Tennessee ($2,848), andMissouri ($2,891) . (See Chart 2 .) •

Chart 4State Government Tax Collection s

by Source ($Billions), FY 1983 - 1993

Avg .Growt h

RateGrowt h

RateType of Tax 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 '83-'93 '92-'9 3

Total State Taxes $171 .5 196 .9 215 .9 228 .1 246 .5 264 .1 284 .4 300.8 313.1 330.4 356.5 7 .6% 7 .9 %

Annual % Change 5 .5% 14 .8 9 .7 5 .7 8 .0 7 .1 7 .7 5.8 4 .0 5.5 7 . 9

Total State Taxes(Constant 1983 $) $171 .5 189 .3 199 .9 205 .5 214 .3 221 .9 229.4 231 .4 231 .9 239.4 251 .1 3.9% 4.9 %

Annual % Change 1 .3% 10 .4 5 .6 2 .8 4 .3 3 .5 3.3 0.9 0.2 3.2 4.9

Note: All years include data from the District of Columbia .

Source : 1983-1992 Bu reau of Census ; 1993 Tax Foundation survey of state revenue offices .

4

Capital

Tax Cut:Economic Growth d Deficit Reduction

the largest tax increase in history andwill hamper job creation for years tocome .

The Clinton solutions are no tcapable of solving the twin problemsof deficit reduction and job creation .The economic "recovery" that beganin early 1992 is producing weak jo bgrowth. In California, high unemploy-ment has been exacerbated b ymassive job-killing tax increases at thestate and federal level in the name ofdeficit reduction. The public is nolonger buying what the big-spendingliberals want to sell, namely make -work programs that only add to the$ 280 billion a year federal deficit, andtax increases that destroy jobs .

It is time to relearn a lesson fro mJimmy Carter's stagflation . Then ,"radical" tax-cutting proposals by Jac kKemp, William Roth, Bill Steiger, an dRonald Reagan proved that thePhillips Curve did not exist. Now,another radical sounding tax-cuttingproposal has emerged to dispel theClinton Curve . Specifically, capitalgains tax reduction is the one majorfiscal policy tool that addresses bothgoals that dominate the economicdebate . Eliminating taxes on capitalgains promises to create long-termprivate sector jobs and reduce thedeficit . As a bonus, it will increaseworker wages, and increase revenue sto state and local governments as well .

If the goal is to create jobs andincrease living standards, a zero capitalgains tax would be best . A recentstudy by the Institute for PolicyInnovation (IPI), using a dynamicanalysis that takes into account manyof the variables that drive economicactivity, predicts impressive results i njob creation, capital formation ,economic activity, private secto rwages, and government revenue .From 1994 to 2000, a zero capita lgains would result in an additionalGDP growth of $1 .5 trillion, 1 . 1million new private sector jobs, a$1,884 increase in average annualwages for all workers, and $25 billionin additional government tax revenue .

Rep. David Dreier (R-Calf)

During the 1960s and 1970s, thecountry's major economic concern swere unemployment and inflation .Fiscal policy was defined by thePhillips Curve, which said that marke t

economies faced an inevitable trade-off between those two forces.Encouraging job creation meantaccepting higher inflation, accordingto the model, while fighting inflatio ndemanded higher unemployment. Itwas not until Washington policymakers faced "stagflation," with highunemployment and high inflation, tha tradical policies were given a chanceto prove that creating jobs andreducing inflation could be achievedsimultaneously .

Eliminating taxes on capital gainspromises to create long-term private

sector jobs and reduce the deficit .As a bonus, it will increase worker wages,

and increase revenues to state an dlocal governments as well

Today, fiscal policy doctrine isagain controlled by a presumedeconomic trade-off. This time, thetrade-off is between stimulating jo bcreation and adding to the federaldeficit . Conversely, the doctrineconcludes that reducing the deficitrequires some economic pain . Thi snew, and equally incorrect, PhillipsCurve mentality dominates conven-tional wisdom, as President Clinton' sfirst-year economic proposals illus-trate . His $16 billion "stimulus" bil lwas nothing more than a deficit -financed make-work public sectorjobs plan . At the same time, thePresident pushed through a so-calle d"deficit reduction" plan that contains

FRONT &CENTER

5

Completely eliminating the tax o ncapital gains might sound far-fetched ,but it's not a new idea . Back in 1978 ,when stagflation forced creativethinking, Data Resources Inc . (DRI) dida static Keynesian econometric analysi sof a zero capital gains tax . DRI pre-dicted that eliminating capital gainstaxes would boost GNP by $200billion, increase capital formation by$81 billion, and create 3 million newjobs . Just as important from a 1990sperspective, DRI predicted that a zerocapital gains tax would increase netgovernment tax revenue by $38 billio nover five years .

The zero capital gains proposal ,while heavy on the economic growthside, admittedly does not promisemuch in the way of reducing theburgeoning federal deficit . A differentapproach that maximizes governmen trevenue while also expanding eco-nomic growth is to reduce the capitalgains tax to 15 percent, and index it toinflation . According to the IPI study,this would create nearly one millio nnew jobs, increase GDP by $1 . 3trillion, boost average annual wages by$1,500, create $2 .7 trillion in newcapital, and provide $211 billion inadditional federal revenues. No otherplan can promise comparable jobcreation and deficit reduction results .

Two things stand in the way ofthis win-win policy approach . First ,government budget scorekeepers

gurus of conventional economicwisdom—will incorrectly claim that acapital gains tax cut will add to thedeficit . Second, capital gains tax policyis a rhetorical weapon of class warfarethat liberal Democrats will not easilygive up .

To overcome this entrenchedopposition, Americans need to be toldthe truth, and to help accomplish that,I have joined with colleagues in theHouse and Senate to form a bipartisancongressional "Zero Capital Gains Ta xCaucus . "

The Zero Capital Gains TaxCaucus was formed to develop arational policy regarding the taxationof capital formation, moving beyondthe rhetoric of class warfare and the

debate over static revenue estimates .In doing so, the Caucus is starting withthe conception that eliminating thetaxation of capital gains will releasehundreds of billions of dollars of tied-up capital in the economy, and bringimmediate relief to small investors ,small businesses, workers, farmers ,homeowners, and the elderly .

In order to focus sound economi creasoning on the issue of capital gain stax reduction, the Zero Capital GainsTax Caucus organized a Board ofEconomic Advisors . In addition, thecaucus is dedicated to making everyeffort to garner the input of a broad

spectrum of economists, both in th eprivate sector and in academia . As theIPI study indicates, there are signifi-cant economic benefits to be hadfrom drastic reduction, or completeelimination, of the capital gains tax .Compiling an overwhelming collec-tion of evidence in support of this taxreform is the best way to counteractthe incorrect budgetary postulationsof the congressional budget score-keepers .

In addition to bringing economicevidence to light, the Zero CapitalGains Tax Caucus will spearhead thepolitical fight for specific legislativeproposals. The politicization of capitalgains has had immense negativeimplications for the economy .

Important economic reforms havebeen held hostage to political postur-ing, and it will take concerted actionto return the capital gains debate t othe important issues—jobs, capitalformation, and our living standards .The Zero Capital Gains Tax Caucus isfounded on the principle that jobcreation and deficit reduction arecompatible, and that the proof lie sjust a capital gains tax cut away . •

The views expressed in Front & Centerare not necessarily those of the TaxFoundation.

The Caucus is starting with theconception that eliminating the taxatio n

of capital gains will release hundredsof billions of dollars of tied-up capital in

the economy, and bring immediate relief tosmall investors, small businesses, workers,

farmers, homeowners, and the elderly.

6

dation Uncle es Series of Estate T StudiesFirst of Three Monograph sHistory of Transfer x in US.

In the first of three reports onestate taxes planned this year, the TaxFoundation has recently released amonograph titled "A History andOverview of Estate Taxes in the UnitedStates," written by Staff EconomistPatrick Fleenor .

The report covers the federalgovernment's unified transfer taxsystem, which consists of three taxes :• the estate tax, paid on the contentsof decedents' estates ;• the gift tax for transfers of wealt hbetween living persons ; and• the generation-skipping tax, whichincludes transfers to grandchildren o rmore distant descendants .

One finding in the study revolvesaround who exactly bears the brunt o fthe estate tax burden . Out of theapproximately 50,400 estates that fileeach year with the IRS, about 250 ofthem are worth over $20 million .These estates are composed largely ofbusiness assets, such as closely heldstock, farm assets, limited partner-ships, and other non-corporatebusinesses (see chart on this page) .

"This implies that, very often ,most of the wealth held in large estatesis the life work of successful entrepre-neurs and farmers, what might safelybe termed `first generation wealth, ""says Mr . Fleenor . These estates pay thehighest tax rates and most tax perestate . Thus, it is here that the transfertax system—by falling most heavily onthe estates of some of the nation' smost economically productive citi-zens—has its most deleterious effecton the economy .

Much of this monograph coversthe legislative history of the estate tax .For most of U .S . history the federalgovernment has not relied on transfe rtaxes as a permanent source o frevenue . Such levies were instead usedas temporary sources of revenueduring national emergencies . Thischanged in 1916 when the federalgovernment enacted an estate taxalong with the income tax. To prevent

avoidance of the estate tax, Congressenacted a gift tax in 1932 .

Over the past two decades ,Congress has passed a series of laws tooverhaul and modify the federaltransfer tax system. Portions of th eseparate estate and gift tax systemswere unified and levies were impose don generation-skipping transfers . Thesechanges also lowered marginal transfertax rates and significantly reduced thenumber of transfer tax returns filedeach year by raising the filing require-ments .

In fact, prior to 1976 estate taxe swere paid by approximately sevenpercent of estates in any given year .After 1987, the estate tax was paid byno more than three-tenths of onepercent in a given year .

The combined effect the variou stax changes has been to create a rang eof effective marginal and average

transfer tax rates that differ markedlyfrom the statutory schedule .

Mr . Fleenor also notes that in1989, the latest year for which datafrom estate tax returns is available ,estate taxes paid by estates whosegross value exceeded $1 millionaccounted for nearly 96 percent o ftotal federal estate tax receipts ,although they represented less thanhalf of all such returns filed.

The value of the wealth reportedon the estate tax returns filed for 1989decedents totaled almost $87 .7 billion .Slightly over $27 .2 billion, or 3 1percent, was held by estates valuedbetween $1 million and $2 .5 million .The next largest share, $19 .9 billion(22.8 percent) was held by estatesvalued at between $600,000 and $ 1million . Estates valued over $20 millionheld 14.1 percent of this wealth, o r$12 .3 billion. •

Business Assets as a Percent of Total Assets by Estate Size

100 .0% —

csi•

,-

00

8

?

S

jO

82s

'00

2s

8s

~1

7

t8I~p 0

0~

Source : Internal Revenue Service, 1989 Estates .

90 .0 %

80 .0 %

70 .0 %

60 .0 %

50 .0 %

40 .0 %

30 .0%

20 .0%

10 .0%

0 .0%

O

Lo

co

I .

7

FOUNDATIONMESSAG E

ConferenceA dozen top congressional staff and

another 14 U .S . corporate tax leadersparticipated in the Tax Foundation' sFourth Annual U .S .-European Interna-tional Taxation Conference January 5through 12, meeting with European taxexperts from the public and privatesectors in London, Paris, and Frankfurt .

Key issues discussed during theweek included : consumption taxes ,particularly value-added taxes ; healthcare financing ; transfer pricing ; andunitary taxation, which European firmsare concerned could lead states toabandon the traditional "arms-length "standard of international taxation.

Among the highlights :• Discussions in London with SirTerrence Higgins, Member of Parliamentand originator of the British VAT system .• A meeting in London with top official sat Inland Revenue, including Ian Spence ,Director of the International Division ,and Mark Nellphorp, Principal of theInternational Division.• A forum on health care financing i nParis with Michel Durraforg, DeputyMinistry for Health Care for the Frenc hMinistry for Health .• A discussion with Dr. Berndt Runge ofthe German Finance Ministry on auditin gtransfer pricing and income allocation sbetween nations . •

Michel Taly of the French Ministryof Finance discusses his country'stransfer pricing policy with the Ta xFoundation.

See g

-Length•

T. : a . n" the U.S.When it comes to auditing transfer prices and sourcing internationa l

income, the U.S . is in a league by itself—because almost nobody wants to pla yball. That is one of the key messages received by the delegation to the Ta xFoundation's Fourth Annual U .S . European International Tax Conference ,which is described in the column to the left .

The U.S . Treasury maintains a far more adversarial relationship to taxpayer sthan arises between foreign governments and either U .S . or foreign companies .Most countries follow the principles of arms-length pricing : Even though atransaction is between related parties, for purposes of determining taxabl eincome the price at which the goods or services were sold is deemed to be th eprice that would have been charged had the transaction occurred between

unrelated parties—at arms-length .Because transfer prices can be manipulated to

source income and expenses to yield the best taxresult for the taxpayer, the IRS is on guard againstthis sort of tax evasion . The reverse is also true . Byarguing for particular transfer prices, the IRS canmanipulate a taxpayer's total U.S . liability, agains twhich taxpayers are equally on guard .

In the U .K. the apparent principle is there is aright answer to each tax question, and bot htaxpayer and tax authority look for that answerwith as little fuss as possible . Yes, tax cheatingoccurs, and when it is found it is corrected andprosecuted. But by and large, the presumption i sthat all parties are interested primarily in the rightanswer.

The IRS' approach seems to be to pursue every last tax dollar wherever itcan be found, however improbable the claim. This attitude leads taxpayer's tosense that the IRS is capable of highly irrational positions, which in turn leadsto a strong sense of "us versus them." This culture of adversity puts greatpressure on the total tax system, but perhaps nowhere more so than o ninternational transfer pricing .

Recognizing the Gordion knot it is tying, the Treasury has initiated th eAdvanced Pricing Agreement (APA) program in which it and the taxpaye rcollaboratively determine in advance the transfer prices that will be used for taxfiling for certain intercompany transactions for a set period of time . Thisprogram is cooperative by design and marks a radical departure from th etraditional relationship between the tax service and the taxpayer in the U.S .

Certainty is one of the great benefits for taxpayers entering into an APA .Without it, a taxpayer may not know at the time of the transaction (and fo rmany years thereafter) the true after-tax consequences of his economic activity .The APA eliminates this uncertainty with respect to the transfer price .

Our foreign trading partners, in contrast, see little need for participating inthe APA process because they put far less pressure on transfer price auditing .And, as our discussions with the finance ministry representatives in each of th ecountries we visited revealed, they do not have the resources to dedicate to abilateral or multilateral APA process . Consequently, the certainty taxpayers areseeking in an APA with the Treasury may be partly lost by the failure to achiev ea similar agreement with foreign tax authorities .

The APA program remains an important advance in the Treasury's ap-proach to international taxation . At a minimum, it represents a recognition tha ttransfer price policy is in trouble . Perhaps this breakthrough can be followe dup with a more European-like approach to transfer pricing in which the focus i son finding the right answer, not necessarily on finding the last tax dollar . •

J.D. FosterExecutive Director andChief Economist

8

Telopment Division

TAX FEATURES

Tax Features (ISSN 0883-1335) is published by theTax Foundation, an indepen-dent 501(c)(3) organizationchartered in the District ofColumbia.

Co-Chairman an dDistinguished Fello wThe Honorable Bill Frenzel

Co-Chairma nDominic A . Tarantin o

Executive Director andChief Economis tJ .D. Foster

Counsello rJames C . Miller, III

Administrator and Director,Foundation DevelopmentGaye Bennet t

Adjunct FellowCharles E . Mcl.ure, Jr .

Tax CounselLynn Walker

Special Tax CounselJ . Dwight Evans

Manager, CorporateDevelopmen tReneé Nowland

Special EventsMichelle Rubin

Editor andCommunications Directo rStephen Gol d

Tax Foundatio n(202) 783-2760 Tel(202) 942-7675 Fax

FOUNDATIONUPDATE

To keep up with growing corporate andfoundation interest in the organization's re -search, the Tax Foundation has recently ex -

Gaye Bennett

Eastlyn McIntyre

panded its development division, hiring Gay eBennett as Administrator and Director of Founda-tion Development and Eastlyn McIntyre a sDevelopment and Communications Assistant .Reneé Nowland, formerly Manager of Corporat e

Foundation Welcomes FiveAdditional Contributors

The Tax Foundation is pleased to an-nounce the addition of five companies to itslist of contributors . The newest members:• Association of American Railroad s• Chase Manhattan Ban k• Fidelity Graphic Company• Oracle Corporation• Morrison Knudson Corporation

and Foundation Development, was promoted t oDirector of Corporate Development .

Ms . Bennett comes to the Tax Foundationfrom Morrison Knudson Corporation in Boise ,Idaho, where she served as Administrator, BoardMember, and Assistant Secretary for the firm' scharitable foundation, and as Treasurer ofMKPAC, the company's political action commit-tee . Prior to that, she worked on Capitol Hill withSenator Steve Symms (R-Idaho) .

Ms . McIntyre, prior to joining the TaxFoundation, was with IBM Corporation for 2 4years . Most recently she served as Senior Publica-tions Specialist, and as Technical Team Leader an dsoftware packaging consultant, in the InformationDevelopment Technology Division of theBethesda, Md ., office .

Those seeking assistance regarding thei rmembership renewal, and those with questionsabout membership or contributor benefits, shoul dcall the Foundation's Development Division . •

Correction

In the December issue of Tax Features ,an article on the impact of the OmnibusBudget Reconcilation Act of 1993incorrectly stated the percentage oftaxpayers who will see higher indi-vidual income taxes as a result of th echanges. The correct, figure is 4. 6percent.

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