Cash Flow Income Tax Act of 1985

Summary

Cash Flow Income Tax Act of 1985 - Title I: Cash Flow Income Tax - Subtitle A: Cash Flow Income Tax - - Amends the Internal Revenue Code to reduce the tax rates for individuals and the number of tax brackets. Imposes an income tax of 30 percent on the taxable income of an estate or trust in excess of $3,000. Provides for a yearly cost-of-living adjustment for the standard deduction, the dependent credit, and the "ten percent bracket." Repeals: (1) the minimum tax for tax preferences; (2) the accumulated earnings tax; (3) the personal holding company tax; (4) the foreign personal holding company tax; and (5) the dividend paid deduction. Imposes a 30 percent income tax on the taxable income of every corporation. Provides that such tax shall be equal to at least 30 percent of the accumulated surplus of a corporation. Revises the definitions of "taxable income," "adjusted gross income," "net income," and "gross income." Provides that the standard deduction shall be $8,000 in the case of a joint return ($4,000 for single individuals or married filing separately). Sets forth restrictions on the availability of the standard deduction. Provides for an unlimited carryforward of any negative amount of a corporation's adjusted net income flow or a taxpayer's taxable income. Allows the taxpayer a credit against the tax for each dependent exemption. Provides that such credit may not exceed the tax of the taxpayer. Subtitle B: Base Broadening - Repeals various tax credits and tax exclusions. Includes in gross income: (1) amounts received as prizes and awards; (2) amounts received as unemployment compensation; (3) social security and tier 1 railroad retirement benefits; and (4) an amount equal to the cost of group-term life insurance carried by an employer for an employee. Includes in gross income the value of property acquired by gfit, bequest, devise, or inheritance. Permits a $5,000 per year exclusion for such property. Repeals various tax deductions. Allows a deduction for interest incurred to purchase, carry, or improve an investment asset. Prohibits the deduction of consumer interest. Limits the amount of the deduction for charitable contributions to five percent of the taxpayer's adjusted gross income. Permits a deduction for medical and dental expenses only to the extent such expenses exceed ten percent of adjusted gross income. Permits the deduction for individual casualty losses only to the extent that the aggregate amount of such losses sustained during the taxable year exceed $500. Treats a husband and wife filing a joint return as one individual for purposes of this limitation. Repeals the tax provisions relating to: (1) the limitations on allowance of capital losses; (2) Domestic International Sales Corporations; (3) Foreign Sales Corporations; (4) the foreign tax credit; (5) export trade corporations; (6) taxation of capital gains; (7) S corporations; and (8) cooperatives. Title II: Repeal of Estate and Gift Taxes - Repeals the estate and gift tax.

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Timeline

1. 5 October 1984

   Introduced

   Referred to House Committee on Ways and Means.

   Source: IntroReferral

2. 5 October 1984

   Introduced

   Introduced in House

   Source: IntroReferral

3. 5 October 1984

   Introduced

   Introduced in House

   Source: IntroReferral

Votes

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Versions

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Documents

1 official file

• Introduced in House

  summary · EN · 5 October 1984

  Open at official source

Sponsors

• Rep. Heftel, Cecil [D-HI-1] · D · Sponsor
• · hswm00 · Standing

Related records

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