Newspaper article THE JOURNAL RECORD

Oil, Timber Industries May Get to Keep Tax Breaks

Newspaper article THE JOURNAL RECORD

Oil, Timber Industries May Get to Keep Tax Breaks

Article excerpt

WASHINGTON (AP) - The oil and timber industries, which would lose a big chunk of their special tax breaks under President Reagan's tax-overhaul proposal, are one step closer to retaining them as part of the plan being developed by the Senate Finance Committee.

The panel, whose membership is heavy with lawmakers from oil and timber states, agreed tentatively Monday to keep provisions in the tax law that were designed to help those industries, as well as provisions that benefit mining and farming.

However, that decision, which came without a vote or consideration of any amendment, is subject to change. Several members said they want to offer changes later.

Sen. John Chafee, R-R.I., complained that retaining those special tax benefits was simply shifting the burden to others.

""That money's going to have to come from someplace else'' to pay for the tax-rate reduction and higher personal exemption promised in the bill, he said.

The tentative decision on the oil and gas provisions also killed the tax credit of up to $300 that had been allowed taxpayers as an incentive to insulate or otherwise increase the energy efficiencyof their homes. The credit died last Dec. 31. Although there is some sentiment for renewing it, Reagan wants to let it die and the House already has voted to do that.

The Finance Committee was turning its attention today to Chairman Bob Packwood's proposal for refining the depreciation system, under which businesses recoup through the tax system money spent for plant and equipment. Packwood, R-Ore., says his proposal would be more advantageous to business than present law, Reagan's plan or the big tax-overhaul bill passed by the House last December.

In its first action on the tax bill, the committee on Monday rejected Packwood's plan to tax high-income investors on interest earned on otherwise tax-free state and local government bonds they nowown. The committee shouted him down on a voice vote, apparently concluding it would be unfair to tax an investment retroactively. …

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