Tax Legislation

WASHINGTON -- They represent just four easy-to-miss little items in a 700-page tax bill heading for House action. But they could prove highly significant if you:* Expect to use the $125,000 exclusion for capital gains on your home sale profits after age 55.* Maintain an office in your home and take depreciation deductions.* Rent out your home for a couple of weeks and hope to keep the rental income tax-free.* Want to use the standard tax-deferral "rollover" rules for home-sale profits after a divorce or separation.

FROM the Great Debate:Q. I would like to ask a question for both of you to answer -- do you really think that $4.50 is too much to make per hour? The minimum wage I'm talking.President Clinton: I'm for raising it. [Applause. Cheers.]Speaker Gingrich: I think that -- let me say that I think that I'd like to see every American make as much as they can possibly make. But I also am concerned -- I also -- no, I don't think it's too much. I am very concerned, however -- there is a disagreement among economists about this -- I am very concerned that if you raise the cost of the first job for the poorest person, for example in the inner city, that what you tend to do is increase black male teen-age unemployment, which is exactly the thing you don't want to do. My goal is to have a rapidly growing economy where, frankly, wages keep going up, because people are better educated, more productive, and can compete in the world market.

WASHINGTON -- Americans would not see any of the tax relief promised by House Republicans until after Congress acts to balance the federal budget, under a compromise being fashioned by Republican leaders.The new proposal would delay the tax cuts promised in the House GOP "Contract with America" until after Congress adopts legislation to produce a balanced budget by 2002. Congress also would have to complete the first year of spending cuts before tax cuts would be granted.If the compromise formula is adopted, Republicans would seek to have the legislation completed this fall -- in time for the first round of tax cuts to take effect next year.

WASHINGTON -- After an unexpectedly fractious start yesterday to the House-Senate conference on President Clinton's tax proposals, an exasperated Sen. Daniel P. Moynihan pulled aside his chief tormentor with a pointed question."

In keeping with the political fun and games always played with tax legislation, Democrats are in the process of deciding whether to embarrass President Bush by forcing him to pocket-veto a Christmas-tree bill passed on the last day of Congress or to delay in hopes he will sign it just after election day. We favor a veto.No tears need be shed for Mr. Bush because he is in this trap. It is very much of his own making. The voluminous measure, passed in the House in the wee hours as it rushed to adjournment, contains several measures the Republican incumbent advocated, including tax concessions to those who invest in 50 low-income enterprise zones and tax breaks for certain industries and special groups that could give the economy a boost.

ANNAPOLIS -- An unhappy state Senate did today what it tried to avoid all session: It voted to force virtually every Marylander to pay more in taxes.The $245 million plan, approved on a relatively close 26-20 vote (24 votes are required for passage), now goes to the House of Delegates along with the Senate's pared-back version of Gov. William Donald Schaefer's $12.5 billion spending plan for fiscal 1993.Although the tax plan likely will be changed by the House, the Senate version would expand the state sales tax to cover a variety of products and services not now taxed, such as pretzels, potato chips and prepared foods sold in grocery stores; repair services; dry cleaning; car phones; lawn care; and pay-per-view TV, among others.

WASHINGTON -- "Middle-class America needs a tax cut," says Sen. Barbara A. Mikulski, D-Md.But the "Middle Income Tax Cut Bill" that she's co-sponsoring isn't just for the middle class."

As summer wanes, here is a collection of unrelated "workplace" notes from the briefcase, notebook and computer memory system:BEST LINE: "What effect has the recession had on me? I sleep like a baby -- every three hours I wake up and cry." (INC, September).DOING IT WRONG: "How to Fail in Business" in Success, September, is worth reading. Excerpts: "If a client writes with a complaint, send it to the legal or operations department for response. . . . Don't bother to build up true quality in your product or service.

In the past decade, Congress has enacted 17 major revenue measures. That means new income tax legislation is introduced before taxpayers have absorbed the provisions of the previous legislation. Result: It seems no one knows the rules of the game -- not even the Internal Revenue Service or members of Congress.The American Institute of Certified Public Accountants is appalled. The institute is leading an effort to encourage Congress to simplify the system. With luck, some effort toward tax simplification may be debated this spring.

If there is a theme for the 1991 General Assembly session that begins a 90-day stand in Annapolis today it is the government's lack of money. The state is deep in the revenue hole, putting a crimp in every agency agenda. That could make this an unhappy meeting for lawmakers, who must face the public's wrath for decimating popular services or for raising taxes to keep these programs going. It is a no-win situation.Gov. William Donald Schaefer is in a similar bind. He plans to support a hefty gas-tax increase to keep the state's road-building and mass-transit priorities on schedule.