[Congressional Record Volume 145, Number 81 (Wednesday, June 9, 1999)]
[Extensions of Remarks]
[Page E1203]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     LEGISLATION TO REPEAL PERSONAL HOLDING COMPANY TAX PROVISIONS

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                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                        Wednesday, June 9, 1999

  Mr. RANGEL. Mr. Speaker, today I am introducing legislation to repeal 
the personal holding company tax provisions of the Internal Revenue 
Code. I am introducing this legislation because the circumstances that 
gave rise to the enactment of those provisions no longer exist. Some 
have referred to those provisions as ``a crusade without a cause.'' Now 
those provisions are largely a complex trap into which unwary 
corporations may fall.
  The personal holding company tax provisions were enacted in 1934 when 
the maximum individual income tax rate was substantially higher than 
the maximum corporate tax rate and when corporations could be 
liquidated on a tax-free basis. Those circumstances created a potential 
for abuse, and the personal holding company tax provisions were an 
appropriate response to that abuse. Neither of the circumstances that 
gave rise to the enactment of these provisions is true today.
  Mr. Speaker, I am confident that we will continue to have an income 
tax system in this country. The failure of the Republican controlled 
Congress to develop an alternative tax system proposal is ample 
evidence of the unrealistic nature of the Republican rhetoric on this 
issue. Therefore, we should attempt to improve and reduce the 
complexity of the income tax system whenever possible. I am very 
pleased that Reps. Coyne and Neal have introduced significant 
simplification proposals. The bill that I am introducing today is 
another in a series of tax simplification proposals introduced by the 
Democratic Members of the Committee on Ways and Means. I hope it and 
other simplification measures can be enacted quickly.

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