Tax Foundation

Vol . 34, No. 10 November 199 0

Tax Features

Tax Foundatio n

Median FamilyIncome Falls 1

"FrontBurner"

1

Kanaga toReceive Award 1

U.S. TransferPricing Policy 3

New Budget'sState-by-StateImpact 4

President'sMessage 5

Viewpoint 6

Annual Dinne rand Conference 7

West Coas tMember Briefings 8

U .S. Family's Real IncomeTo Drop in 1990 Due t oHigher Taxes and Inflatio nThe one-two punch of rising inflation an ddirect federal taxes will reduce the purchasin gpower of the U.S . family's income in 1990 . A

typical family— a household with two earner semployed full-time year round with twodependent children — will experience a ne tdecrease in real income of $614 in 1990 afte radjusting for direct federal taxes (see figureabove) . This is the most substantial decline

See Median Family Income on page 5

William S. Kanaga to ReceiveDistinguished Service AwardAt 1990 Annual Dinner

William S. Kanaga, for-mer chairman and chiefexecutive officer o fArthur Young & Co. ,will receive theFoundation's Distin-guished Service Awar dfor the Private Sector .Senator Bob Packwoo dis the public sectoraward recipient . Theoccasion will be the

Foundation's 53rd annual dinner on Decem-ber 5 . For details on attending the dinner an dthe 42nd annual national conference before -hand, see page 7 .

I once heardthat the defini-tion of the Eif-fel Tower is th eEmpire Stat eBuilding afte rtaxes . I'm afraid that this definition willtake on new meaning with the recentl y

approved budget package. Not only ha sCongress further stripped financial where -withal from the American taxpayer, but it i sone more step toward taking a strong econ-omy and turning it into a shell .

I voted against the budget because i tmeets virtually none of the criteria Americ aneeds to meet its future in an increasinglycompetitive world . Some tried to sell thepackage as a bipartisan success that provide s$490 billion of deficit reduction over the nex tfive years. But, what we really have is apackage that includes $200 billion in ne wrevenue made up of tax increases, user fee sand increased Medicare premiums . The rest i s$70 billion in domestic spending reductions ,$180 billion in defense savings and $64 billio nin savings on interest on the national debt.This does not include the increased spending ,tax breaks, and income redistribution, all ofwhich detract from deficit reduction.

A closer look at the budget, especially thetax components, illustrates the real burden i twill have on the American public and ou reconomy . Proponents argue that the net ta xfigure is $137 billion, but in reality total ta xincreases will hit $164 billion . The $27 billio ndifference includes tax breaks and incomeredistribution .

See Roth on page 2

Senator William Roth, Republican from Delaware,serves on the Senate Committee on Finance .

The opinions expressed in the Front Burner are no tnecessarily those of the Tax Foundation . Editorialreplies are encouraged .

Median Family Income Before and AfterDirect Federal Taxes and Inflatio n1980-1990$66,000 —

$60,000 -

$45,000 —

$40,000 —•

$36,000 —

$30,00 0

$25,000

'80

'82

'84

'86

'88

'90

Income Before Direct Federa lTaxes and Inflatio n

Income After Direct Federa lTaxes and Inflatio n

William S. Kanaga

BudgetPlays Shel lGame withAmericanPeople

Senator William Roth

2

Tax Features November 1990

Roth from page 1

The increase in Health Insurancewage base, the phase-out of persona lexemptions, and the reduction of item-ized deductions are only three of 26different tax increases in the budget —many of which will hit the middle clas sright on the chin . While the taxes in thi sproposal are for certain, the spendingreductions aren't .

Only $70 billion of this package arereal reductions — reductions in Medi-care, Federal Employee Retirement ,Veterans programs, student loans and

"Not only has Congressfurther stripped financialwherewithal from theAmerican taxpayer, but it isone more step towardtaking a strong economyand turning it into a shell. "

agriculture . New revenue increasesoutpace entitlement savings three t oone. Under this so-called deficit reduc-tion plan, total government spendin gwill be $100 billion higher in 1991 thanit was in 1990 .

Even during this time of austerity ,this legislation builds in increasin gspending for discretionary programs . Ifthere were guarantees that these in-creases were necessary, it would b e

"[There are] 26 different taxincreases in the budget —many of which will hit th emiddle class right on thechin. "

one thing . Unfortunately, these guaran-tees don't exist . We are already hearingof discretionary funds to be used fo rrenovating the home of Lawrence Welk ,studying the potential for a nationa lbicycle policy, as well as looking for aplace to build a new Congressional staffgym. In other words, Congress not onl ypassed the buck — but spent it .

Concerning defense cuts, the $180

billion of this package counted as de-fense savings may very well be real, bu tis not the result of the budget negotia-tions . It represents a windfall due to th e

"We are already hearing o fdiscretionary funds to beused for renovating thehome of Lawrence Welk,studying the potential for anational bicycle policy, a swell as looking for a plac eto build a new Congress-ional staff gym. In otherwords, Congress not onlypassed the buck — butspent it. "

communist meltdown . And, like awindfall, this $180 billion is fortunate a tbest and illusory at worst .

Another component of the pack -age is the $64 billion in reduced interestpayments on the national debt . Thisfigure is based on extremely optimisti cinterest rate assumptions and has ver ylittle to do with the hard choices Con-gress must make to get the deficit undercontrol .

Some would argue that the deficitreductions are for real. But even theproponents of the package admit tha tGramm-Rudman is only advisory dur-ing the first three years — with no biteto limit spending. The so-called spend-ing caps intended to monitor spendin g

"Only $70 billion of thispackage are real reductions— reductions in Medicare ,Federal Employee Retire-ment, Veterans programs ,student loans andagriculture . New revenu eincreases outpace entitle-ment savings three to one . "

through the year are so flexible tha tspending will continue to increase

during the next five years. These capsor ceilings allow for emergency spend-ing increases as well as inflationaryadjustments. However, nowhere in thebill is there an allowance for emer-gency tax cuts to stimulate the econ-omy in a recession .

In addition to their rubber-like flexi -bility, these caps will have no effect o nIRS funding increases, credit re-esti-mates, Egyptian debt forgiveness, addi-tional IMF contributions, emergenc ysupplementals and Operation Deser tShield.

For all of these reasons, I believethe budget package fails the Americanpeople . It will fail their economic needs .It tries to lay the blame of the deficit andbudget debacle at their feet . It tries tomake them believe that the problem isnot that Congress is spending too much— or that the government is wastin gmoney — but that they are not bein gtaxed enough. I don't believe it andneither do they . Treasury revenue has

"Under this so-called deficitreduction plan, totalgovernment spending will b e$100 billion higher in 1991than it was in 1990 . "

doubled in ten years — due to th eeconomic boom provided by the ta xcuts of 1981 . Even that windfall wasn'tenough for the big spenders .

After this tax agreement, Ameri-cans have as much reason and right torebel as they had in 1774 .

Tax FeaturesTax Features (ISSN 0883-1335) is publishedby the Tax Foundation which operates as aseparate unit of Citizens for a Sound EconomyFoundation . Original material is no tcopyrighted and may be reproduced . Pleasecredit Tax Foundation .

Co-chairman James Q . RiordanCo-Chairman James C . Miller IIIPresident Wayne GableVice President Dan WittD irector of Fiscal Affairs . . . . Paul G . MerskiSenior Fellow B. Anthony BillingsEditor William Ahern

Editorial Asst Gretchen Georgiadis

Tax Foundation470 L'Enfant Plaza, S .W .

Suite 711 2Washington, D .C . 20024

202-863-5454

Tax Features November 1990

3

U .S. Transfer Pricing Provisions IgnoreEconomic Realities of the 1990s

Richard M. Hammer

The complexity of U.S. tax provisions on foreign sourceincome bedevils U .S . multinational firms . But when lookingat American tax policy's problems in the foreign area, com-plexity is only the tip of the iceberg . Tax laws are change dwithout serious thought to the underlying tax policy; taxpolicies are not updated to the modern investment climate ;and perceived tax law abuses are addressed with no regardto how the cure fits into the scheme of American foreign ta xpolicy . What these problems really amount to is a failure b yCongress, perhaps even a complete abdication of its respon-sibility for shaping a coherent and sensible foreign tax policy .

In this broad range of issues, I will focus on how U .S .transfer pricing rules affect domestic transactions, bothinbound and outbound, even though the glare of recen tpublicity has been on the transfer pricing practices of foreign -owned companies bringing their products to the U .S .

From an overall policy perspective, the U .S . subscribes tothe well-known "arms length" standard in transfer pricing .This generally keeps the U .S . in line with the rest of the world,most of whom adhere strictly to this standard. However, theU.S . has gradually reduced its dependence on true marke tevidence in establishing what is, or is not, arms-length. So far,these deviations from true market price have been restricte dto narrow areas such as the safe-haven or administrativepricing formulae of the Domestic International Sales Corpo-ration (DISC) and the Foreign Sales Corporation (FSC) .

Recently proposals have been discusssed on Capitol Hil lwhich would introduce a rigid 50/50 profit split on products

productive economically and resul tin a nightmare when determinin gappropriate royalty adjustments .

Enacting the superroyalty pro -visions, Congress felt geographicrights to intangibles were beingtransferred to foreign affiliates be-fore their full value was achieved i nthe United States . They considere dthis deleterious because the costs of developing the associ-ated patent or "know how" were borne by and may havebenefitted from the liberal U .S . R&D relief rules . If so, therevenues from the technology should accrue to the U .S . par-ent, not to the foreign affiliates which may have had little t odo with developing the patent (used interchangeably with in -tangible) .

In spite of opposition from American businesses havin gforeign affiliates, Congress insisted on passing the superroy -alty rules . They will produce needless litigation, onerous com -pliance measures, and competitive impediments on Ameri -can companies' ability to conduct trans-border transactions .

A White Paper issued to clarify the superroyalty provi-sions asserted that the "commensurate with income" standar dapplicable to foreign transfers of intangibles requires tha tperiodic upward adjustments to royalties continue indefi -nitely into the future. Adjustments are mandated even if thearrangement was truly arms length when the contract wasconsummated . So if a U .S . multinational develops a new high-

"if foreign tax authorities refuse tax deductibility for superroyalty payments, double taxation will result .Time will tell, but all indications to date are that foreign authorities are not going to roll over and pla ydead. Some will refuse simply because superroyalties are a breach of the arms length principle . "

shipped to U .S . distribution subsidiaries by foreign parents .This significant new deviation from the arms length standar dwould likely attract the attention of other nations . Earlierattempts to inject formulae into the transfer pricing proces swere more akin to facilitating the identification of an arm slength transfer price, using what might be called a "rough cu tapproximation," rather than an overt attempt to reject thearms length standard .

The Tax Reform Act of 1986 (TRA'86) introduced the firs tmajor deviation from the arms length standard by adding th enow infamous superroyalty provisions on intercompanytransfer pricing on foreign transfers of intangible propertyrights . Unlike the earlier statutory formulary approach fo rprofit allocation, the superroyalty provisions are subjectiveand, unfortunately, open-ended .

In a nutshell, superroyalty provisions require that pay-ments on transfers of intangibles to related parties, eithe rthrough the sale of an exclusive or non-exclusive license ,must be "commensurate with the income attributable to th eintangible ." These deceptively simple words could be counter-

tech product, licenses it at arms length terms to foreignaffiliates, and earns high profits because of foreign affiliates 'efforts, the IRS would be free to increase royalty payments .

If foreign tax authorities refuse tax deductibility fo rsuperroyalty payments, double taxation will result . Time wil ltell, but all indications to date are that foreign authorities ar enot going to roll over and play dead . Some will refuse simplybecause superroyalties are a breach of the arms lengt hprinciple . Such a scenario bodes especially ill for U .S .multinationals loaded down with excess foreign tax credits .

Shortcomings in the transfer pricing area epitomiz econgressional failure in the foreign tax area . The U .S . legis-lative focus appears to be primarily on generating revenu eand closing tax loopholes . Such a myopic approach losessight of the logical thread, the rhythm, that a sound tax policyand tax system require .

Richard M. Hammer, International Tax Partner, Price Waterhouse ,is Chairman of the Tax Committee for the U.S. Council forInternational Business. This article is taken from his speech to theFoundation 's international tax policy seminar September 25, 1990 .

4

Tax Features November 1990

New Budget Raises Taxes Sharply ; Hits States Unevenl yThe new budget President Bush andcongressional leaders have given th eAmerican people, touted as the grand-est attempt at deficit reduction in his-tory, will cost every man, woman, an dchild an average of $664 .68 in newtaxes over the next five years . Putanother way, the agreement plans toextract $164 .6 billion in extra revenu efor the federal government by 1995 .

The impact of the taxes will not b efelt evenly from state to state (see ma pbelow) . Many residents of states al -ready paying among the highest per -capita federal tax burdens will have t ofork over an even greater share . Con-necticut, New Jersey, District of Colum -bia, and Massachusetts residents wil lface the largest per capita tax increases .While no state will escape unscathed ,residents of Mississippi, Utah, and WestVirginia will not be hit as hard . Theadditional per capita burdens rang efrom a high of $869 .76 in Connecticut to

a low of $499 .88 in Mississippi .Why will some states have to pa y

more? Income levels and consumptionpatterns are the determining factors, sodemographics dictate how much of th eextra tax burden each state will bear.With over 42 percent of the new reve-nue coming from high-income indi-viduals, states with relatively high per-sonal incomes will be hard hit by th efollowing provisions :

n the new 31 percent top incometax rate ;

n the increase in the alternativeminimum tax rate to 24 percent;

n the raising of the Medicare wagecap from $51,300 to $125,000 ;

n phase-out of personal exemp-tions for taxpayers with adjusted gros sincomes above $100,000 (single tax -payer), $125,000 (head of household) ,and $150,000 (married, joint return) ;

n reduced itemized deductions (3percent over $100,000) ;

n new 10 percent tax on luxuryitems .

The budget includes comsumptiontaxes that generally hit low- and middle -income earners hardest . These will havea more dramatic impact on states withrelatively low personal income levels .They include :

n the additional five cent per gal-lon motor fuel tax;

n the permanent extension of thetelephone excise tax ;

n the increase in the tobacco tax,an additional 8 cents by 1993 ;

n the increased taxes on beer, wine ,and distilled spirits .

This year, the average Americanwill spend 82 days working to pay hisshare of federal taxes . With $164 .6billion in guaranteed tax increases ove rthe next five years, every American wil lbe working longer for Uncle Sam, butsome states will be shouldering a dis-proportionate share of the load.

New Budget's Additional Burden to Per Capita Federal Tax Burden State by State

Fiscal Years 1991– 1995National Average = $664.68

AK$782.24

H I$629.80

• Como

Source : Tax Foundation Federal Tax Burden by State model

Tax Features November 1990

5

Wayne Gable

Median Family Income from page 1

since 1981 . The family's earnings areeroded even further by indirect federaltaxes, such as excises, and state andlocal taxes not shown here, all of whichhave been increasing sharply . Signifi-cant gains for the median family ha dbeen achieved in the mid-'80s, whe nincome rose an average of $762 pe ryear between 1982 and 1987 .

The two-earner family that mad e$29,627 in 1980 is now earning an esti-mated $ 51,421 . But this apparently hefty$21,794 increase in the family pay-check over ten years was slashed b ydirect federal taxes and inflation to anet gain of only $3,228. In other words ,the sizable 73 percent nominal incom egain the two-earner family has mad esince 1980 has been reduced to only anine percent gain by direct federaltaxes and inflation .Federal Taxes

Since 1980, the federal income taxbill paid by the median family has risen56.9 percent. As a percentage of th efamily's total income, the federal in -come tax claimed 13 .7 percent of thefamily's total income in 1980, fell to alow of 11 .8 percent in 1985, and re-bounded to 12.4 percent in 1990 .

The chunk that Social Security takesout of the typical family's income hasincreased more steadily . At $3,934 i n1990, it is more than double the $1,81 6paid in 1980 . Social Security will claim7.6 percent of the family's 1990 earn-ings, up from 6.1 percent in 1980 .Together, these two direct federal taxe swill absorb 20 percent of family in -come, down only slightly from the 198 1peak of 20 .3 percent.Inflation

Rising inflation contributed to thedecline in the typical family's purchas-ing power in 1990 . Inflation stood a t13 .5 percent in 1980 before decliningsteadily to a low of 1 .9 percent in 1986 ,allowing the growth rate in family in -come to outpace inflation . Subsequently,however, inflation has accelerated an dalready has exceeded five percent inthe first three quarters of 1990 .

Proposed federal tax increases forFY1991, slowing of income growth ,and the upswing in inflation do notbode well for the American family' spurchasing power in the coming year.

See table at right for more detail onthe plight of family income since 1980 .

Average American Family CouldUse a Break

In Lewis Carroll's Through the Looking Glass, Alice wastold, "Now, here, you see, it takes all the running yo ucan do to keep in the same place . If you want to ge tsomewhere else, you must run at least twice as fast . "Unfortunately, the predicament for America's medianfamily in 1990 is even worse- as hard as the family ha sworked, taxes and inflation have thwarted its effort ,lowering real income by $614. And this does not eve ninclude the state and local taxes and federal excisetaxes the family has to pay on top of that .

Not that salaries have fallen . Indeed, the median family's income befor efederal taxes and inflation will rise an estimated $2,331 this year . But after higherincome and Social Security taxes, along with rising inflation, that gain is just a nillusion. The federal government has played its part in reducing the family' spurchasing power by piling on higher taxes and simultaneously running uphuge budget deficits that hinder economic growth .

Purchasing power's precipitous drop in 1990 is a bitter pill to swallow aftera relatively prosperous decade for the median family . In the 1980s, 1981 was the onlyyear that hurt family income more than this year, and aside from a slight downtickin 1988, every other year ended with greater family purchasing power . The mid-eighties were especially good, showing an average increase of $762 per year fro m1982 to 1987 .

The average family cannot look to the new budget for help . Many new taxes areincluded, and unless the general economy picks up the pace substantially, 1991 islikely to tell the same sad story as 1990 .

We have redefined the median family as two earners working full time the yea rround with two dependents . Until the '80s, the one-worker family was morerepresentative of the workforce, but the proportion of American families with tw oearners has increased to almost 70 percent. The stark reality now is that it takes twoworkers running twice as fast to get anywhere in today's high-tax environment .

1980 $29,627 $4,050 $1,816 $5,866 $23,761 $37,9021981 32,224 4,386 2,143 6,529 25,695 37,15 51982 34,515 4,450 2,313 6,763 27,752 37,8001983 36,106 4,300 2,419 6,719 29,387 38,7811984 38,713 4,634 2,710 7,344 31,369 39,6841985 40,693 4,787 2,862 7,649 32,944 40,2431986 42,492 5,158 3,038 8,196 34,296 41,13 01987 44,536 5,291 3,184 8,475 36,061 41,72 41988 46,658 5,618 3,504 9,122 37,536 41,70 61989 49,090 6,022 3,687 9,709 39,381 41,74 41990d 51,421 6,357 3,934 10,291 41,130 41,130

Median Income for household with two earners employed full-time, year round .b Married couple filing joint return, two dependent children .` Adjusted by consumer price Index, estimated 6% Inflation In 1990 .d Estimate .Source : Tax Foundation ; U .S. Department of Commerce, Bureau of the Census ; U .S . Department of Labor,

Bureau of Labor Statistics; U.S . Treasury Department, Internal Revenue Service .

Median Family Income Before and After Direct Federal Taxesand Inflatio n

1980-1990Two-Earner

Median Family Income

Social

Current

1990Year

Income'

Taxb

Security

Total

Dollars

Dollars`

After-Tax IncomeDirect Federal Taxes

6

Tax Features November 1990

Does the new FY1991 budget reconciliation plan provide aviable solution to the federal budget deficit problem withoutjeopardizing U .S . competitiveness?Months late and under elec-tion pressure, Congress fi-nally passed its budget ove rthe last weekend in October .The stock and bond marketswere unimpressed by the

news, in spite of Fed easing . Thiswas not surprising because th efederal government will still bedraining capital markets by over $ 1billion per day in new borrowing .

During the summit, the Bushadministration went from "no ne wtaxes" to "additional revenues inexchange for real spending cutsand budget process reform" t opretty much just more taxes . It was in many ways a repea tof recent slide-by summits, just with a higher price tag .

To avoid Gramm-Rudman's $85 billion sequester, $164 . 6billion in new taxes were raised over the next five years . Themuch maligned bubble, which makes the code more pro-gressive, was ironically used to promote "taxing the rich "and is now too politically convenient to give up . The so -called spending cuts do not take effect until FY 1993-94, afte rthe 1992 elections—if in fact the cuts ever take place .

The Bush administration was faced with a choice :1) negotiate a package with Congressional Democrats ,reneging on the "no new taxes" pledge, or 2) veto appro-priations bills, and force negotiations in the context of aGramm-Rudman sequester. President Bush chose alterna-tive 1 . With the benefit of hindsight, it is hard to believe thepolitical cost of the second course could have been greater .

"It was in many ways a repeat of recent slide -by summits, just with a higher price tag. "

Of course, we do need to reduce the deficit . What hasbeen forgotten is that it matters whether we do it by cuttingspending or raising taxes . An excessive focus on deficits hascaused us to lose sight of the real issue —economic growth .

In reviewing the drama of the 1991 budget, one isreminded of George S. Kaufman's comment: "I didn't lik ethe play, but then I saw it under adverse circumstances —the curtain was up." Unfortunately, we may have to si tthrough many reruns. With the pledge broken and taxesraised once, we are now likely to face a series of annual ta xincreases to "reduce the deficit," that is, fill in behindspending growth as the government preempts a growin gshare of the nation's income .

It depends on whether Congress and the Administra-tion adhere to the spending targets . If they won't do it now,what reason is there to think they will do it in the future?

The most positive thing about th erecent budget agreement is tha t"finally it's over for another year . "

It's an historic first—a 5-yea rpackage of spending cuts and ta xincreases, which avoided furthe rincreases in corporate tax rates ,avoided further burdens on pri-vate employee-benefit plans, an deven avoided complicating an al-ready bizarre set of foreign taxrules .

It helped level the global play-ing field slightly by imposing taxinformation return requirement son foreign firms doing business inAmerica, much like the returns filed each year by America nfirms . But, it will certainly further confuse our competitiv eposition by imposing the threat of harsh new tax penaltiesin an area already subject to much confusion, namely, inter -company pricing.

Unfortunately, there were also some ominous featuresto this budget process . A "new tax environment of the '90s "has previewed, with societal life-threatening "myths and re dherrings . "

Apparently some Americans still feel they have the righ tto benefit from government expenditures without sharingany increased costs—sort of a "new free lunch . "

While Medicare recipients "demand" no increase intheir costs (it was intended to be 50/50 co-pay from th estart), the younger generation dutifully pays the highestsocial security tax in our history .

While more successful Americans are vilified on nightlyTV for not paying enough tax (but Tax Foundation figuresshow that 46 percent of all income taxes are paid by the to p5 percent), the average American is featured as refusing t opay a few extra pennies in gas tax to help reduce th eenormous federal debt he helped run up .

Although the recent package is a first step, my biggestworry is "what do we do next?" Our most urgent nationalfiscal issue is mustering enough social and political "spunk "to address the deficit crisis with "broad-based cures" tha tfairly and evenly distribute the "pain . "

I firmly believe that under the leadership of GeorgeBush, and with the cooperation of Congress, America canmeet this challenge .

Viewpoint brings concise opinions from experts in ta xand fiscal policy to the readers of Tax Features onquestions that are currently being debated bypolicymakers and the media . The opinions expressedare not necessarily those ofthe TaxFoundation . Editorialreplies are encouraged.

William B. Modab lDirector of Tax AffairsDigital Equipment

Albert E. GermainVice President, Taxes

ALCOA

Tax Features November 1990

7

Public Finance in Crisis :1//‘-duIv"ke/vA

Tax Foundation's 42nd National Conference and 53rd Annual Dinne r

Wednesday, December 5, 1990 at The Waldorf-Astoria Hotel in New York City

Registration/Light Fare 12 :30 p .m . Astor Salon/Foye rConference Sessions 1 :00—5:00 p .m . Astor SalonReception & Dinne r(Black tie optional)

6:00 p.m . Palm Room/Starlight Room

n Direct any questions about the conference or dinner to Dixie Reding at 202-863-5454 . FAX 202-488-8282 .n Reservations should be received by Wednesday, November 28, 1990 .n The Waldorf-Astoria is located at 301 Park Avenue, New York, NY 10022 . Tel : 212-871-4534 .

12 :30 Registration (light fare) James C. Miller IIIDirector, OMB for President

3 :15 Significant Trends in Stat eand Local Taxation

David R . FrancisBusiness Editor

1 :00 Welcome: Wayne Gabl ePresident, Tax Foundatio n

The Ailing Federal BudgetProcess: Is There a Cure?

Reagan, 1985 - 198 8Co-Chairman, Tax Foundation

David Stockman 'Director, OMB for President

Chairman: Haskell EdelsteinSenior Vice President and

General Tax Counse lCiticorp/Citibank, U .S .A .

Christian Science Monitor

Thomas B . JoycePartner, Washington National

Tax Service sIssue Overview : Allen SchickProfessor of Public PolicyUniversity of Maryland

Chairman: Alan Blinder

Reagan, 1981 - 198 5Partner, The Blackstone Grou p

James McIntyre, Jr.Director, OMB for President

James W . WetzlerCommissionerNew York Department o f

Revenue and Finance

Price Waterhous e

5 :00 Adjournmen t

Gordon S . Rentschler MemorialProfessor of Economic s

Princeton University

Carter, 1977 - 1981Partner, McNair Law Firm, P .A .

Benjamin F . MillerCounsel, Multistate Tax Affairs

'No t3 :00 Coffee Break California Franchise Tax Board confirmed

—<

Reservation Form

Name :

Company :

Address :

City : State : Zip :

Telephone : FAX :

Please return reservationform with payment to:

Tax Foundation470 L'Enfant Plaza, S .W.Suite 711 2Washington, DC 20024FAX: 202-488-8282Attn: Dixie Redin g

Conference Fee: Member/$100, Non-Member/$ 125 Dinner/Reception : $250

For the attendees listed, a check made payable to the Tax Foundation in the amount of $ is enclosed.

8

Tax Features November 199 0

Briefings in Los Angeles and San Francisco Brin gFoundation's Message to West Coast

Hosted by Chevron Corporation at the World Trade Club in Sa nFrancisco : (L to r.) J.P. LaCasse, Director of Taxes, America nPresident Companies; Hugh Travailie, Vice President - PublicAffairs, Potlatch Corporation; Steven L . Rosner, Manager - Ta xAccounting Pacific Telesis Group; James C Miller HI, Co-Chairman, Tax Foundation; Glenn White, Co-Chairman, Ta xFoundation Program Committee; and Christine Smith -Annetta

V Manager - Tax Planning Levi Strauss & Co.

A From left to right at the headquarters of Occidental Petroleum inLos Angeles: Host Norman D. Alexander, Vice President -Corporate Affairs, Occidental Petroleum,. Clayton J. LaForce,Dean, UCLA Graduate School of Business; Maureen Reagan;James C. Miller HI, Co-Chairman, Tax Foundation; Paul CHebner, Executive Vice President, Occidental Petroleum; andWayne Gable, President, Tax Foundation .

470 L'Enfant Plaza, S .W.Suite 7112Washington, DC 2002 4

See page 7 for information on the TaxFoundation's Annual Conference an dDinner December 5th at the WaldorF-Astoria Hotel in New York City

From left to right atOccidentak WayneGable, President, Ta xFoundation; Debra A.Gastler, Vice President- Taxes, PacificEnterprises; andAnthony If. Buckman,Corporate Ta xManager, Toyota, USA .

In San Francisco: (Lto r.) JohnJ. Ross,General Tax Counsel,Chevron; James C MillerIII, Co-Chairman, Ta xFoundation; and MartinR. Ktttten, Vice Presidentof Finance, Chevron.

Nonprofit Org .U .S . Postag e

PAI DWashington, D CPermit No . 2979