Page Puerto Rico Senate, Hon. Miguel A. Hernandez Agosto, statement. 9101 9095 Pye, Orrea F., Somers, NY, letter.. 8611 Quinn, F. Robert, Union Camp Corp., Container Division, letter forwarded by 9060 R.J. Reynolds Industries, Inc., J. Tylee Wilson, statement.. 8284 Rally for Freedom, Bill Zimmerman, letter. Rainville, Alice W., city of Minneapolis, MN, joint letter with Hon. Donald M. 8958 8890 Ralston Purina Co., Van Camp Seafood Division, Donald W. Rupprecht, letter. 9107 9031 8804 Ream, David L., National Association of Professional Insurance Agents, statement.... 8456 Resto, Jose Felix, United Puertorricans, letter.. 9106 Reynolds Metals Co., William O. Bourke, letter and statement. Rittenhouse, Stan, Christian Defense League, statement. 8524 8487 Rosenthal, Clifford N., National Federation of Community Development 7546 Rupprecht, Donald W., Ralston Purina Co., Van Camp Seafood Division, letter Sampson, R. Neil, American Forestry Association, statement 9057 San Agustin, Senator Joe T., Ways and Means Committee, Guam Legislature, statement forwarded by Congressman Ben Blaz........ 9099 Sanner, Harvey Joe, Arkansas delegate, American Agriculture Movement, statement..... 8254 8286 Santa Fe Southern Pacific Corp., John J. Schmidt, letter and statement.. 8286 8542 8350 Schwartz, Alec M., Group Legal Services Coalition, American Prepaid Legal Services Institute, joint statement with William A. Bolger, National Resource Center for Consumers of Legal Services. 8425 Schwartz, Carmi, Council of Jewish Federations, Inc., letter 8369 8293 Seafarers International Union of North America, AFL-CIO, Frank Drozak, statement...... 9083 Sebastian, John V., Clayton Brown & Associates, Inc., letter. 8560 8711 Sensenbrenner, Hon. Joseph, mayor, city of Madison, WI, and U.S. Conference of Mayors, statement.... 9049 Sharp, Robert G., Keystone Provident Life Insurance Co., statement. 6524 8759 Signal Environmental Systems, Alfred Del Bello, statement.. 9041 8514 Simington, David N.P., Brewster, NY, letter.. 8544 Slattery, Very Rev. Edward J., Catholic Church Extension Society, letter. 8368 Slosson, Harold, Schererville, IN, letter..... 8804 Smith, Gary W., Chester County (PA) Development Council, and Chester County Development Authority, statement.. 8928 Snelling, Hon. Richard A., Proposition One, Inc., statement. 8609 8544 Society of Professional Benefit Administrators, Frederick D. Hunt, Jr., statement... 8489 Sombrotto, Vincent R., National Association of Letter Carriers, AFL-CIO, statement. 8793 Page Southern Electric System, statement.... 8517 Spinelli, Raymond D., California Association of Realtors, statement.. 8806 Stafford, Most Rev. J. Francis, Diocese of Memphis, statement forwarded by Congressman Harold Ford.... 3516 Steinbach, Sheldon Elliot, American Council on Education, et al., letter 8389 Steinerd, Dennis J., Oak Ridge, NJ, letter..... 8491 Stephens College, Columbia, MO, Marguerite F. Taylor, statement 8379 8611 8717 Storen, Pat, Brownsburg, IN, letter forwarded by Congressman John Myers..... Suffolk County, New York, Joseph R. Caputo, statement and attachments forwarded by Congressman Thomas J. Downey. 8891 9042 Sullivan, Wallace F., New York City Teachers' Retirement System, statement. 8466 Sun Life Assurance Co. of Canada (United States), statement 8726 Tax Executives Institute, Inc., L. Wayne Farrell, statement. Syracuse, NY, city of, Hon. Lee Alexander, mayor, statement.. Taylor, Marguerite F., Stephens College, Columbia, MO, statement 8379 8800 8546 ment... 8831 Texas Citrus Mutual, Ray Prewett, statement submitted by Congressman Tiffany, James J., Counselor Co., division of Newell Co., letter. 8803 Travel and Tourism Government Affairs Council, James E. Gaffigan, letter 8353 Union Camp Corp., Container Division, F. Robert Quinn, letter forwarded by 9060 Union Mutual Life Insurance Co., statement....... 8730 United Brotherhood of Carpenters & Joiners of America, Patrick J. Campbell, 8794 United Catholic Social Services, Rev. Melvin J. Merwald, letter. 8380 United Methodist Foundation of Western North Carolina, Richard D. Bailey, statement.. 8380 United Puertorricans, Jose Felix Resto, letter. 9106 U.S. Catholic Conference, Msgr. Daniel F. Hoye, statement... 8381 U.S. Conference of Mayors, Hon. Joseph Sensenbrenner, statement. 9049 8491 Van Camp Seafood Division of Ralston Purina Co., Donald W. Rupprecht, letter. 9107 Varn, Elizabeth C., Atlanta, GA, statement. 9060 Virginia Mason Hospital, Seattle, WA, statement 9054 Viterisi, Hon. Joe, mayor, city of Paducah, KY, letter.. 9036 Wallace, Hon. George C., Governor, State of Alabama, statement and attachment.. 8902 Ward, Carter D., Missouri School Boards Association, statement. 8983 8620 Washington (GA) Downtown Development Authority, Mary J. Duggan and 8936 Watkins, David A., Tennessee Credit Union League, letter. 8546 Wendt, Frank P., John Nuveen & Co., Inc., letter 8376 West Central Texas Oil & Gas Association, statement 8520 8300 Widby, Tad: Association for Commuter Transportation, statement 8403 8419 Wilkie, Jr., Valleau, Čouncil on Foundations, statement 8371 Wilson, David Gordon, Massachusetts Institute of Technology, statement forwarded by Hon. Thomas P. O'Neill, Jr.. 8622 Wilson, J. Tylee, R.J. Reynolds Industries, Inc., statement. 8284 Wisconsin Woodland Owners Association, Inc., Frederic W. Braun, statement.. 9061 Wolf, Robert E., St. Leonard, MD, letter. 9063 Page Woodward, William R., New York, NY, statement... 8773 Wyoming, State of, Hon. Ed Herschler, Governor, letter and statement for warded by National Governors' Association... 9056 Zimmerman, Bill, Rally for Freedom, letter..... 8890 PART 7 COMPREHENSIVE TAX REFORM FRIDAY, JULY 19, 1985 HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, DC. The committee met, pursuant to call, at 9:05 a.m., in room 1100, Longworth House Office Building, Hon. Fortney H. (Pete) Stark presiding. TOPIC: IMPACT ON INSURANCE COMPANIES Mr. STARK. The committee will please come to order. I would like to welcome the witnesses to today's hearing on the insurance industry. We will hear from representatives of both the life insurance industry, and the property and casualty insurance industry. Although in some respects they are similar in financial structure, in the context of fundamental tax reform these two branches of the insurance industry pose very distinct issues, which I hope today's witnesses will address. Probably everyone in this room remembers the lengthy-not to say exhausting-effort that went behind the changes in life insurance taxation enacted by the Deficit Reduction Act of 1984. It was agreed by us and by the industry that, in the context of current law, this effort probably eliminated the abuses we had seen in this industry, and put the life insurance companies on a level playing field with other financial intermediaries. This agreement, of course, is contingent on revenue figures we see over the next few years from this industry. However, in this hearing we should consider how this picture has been altered by the prospects of fundamental tax reform, and of major changes in the taxation of other financial intermediaries. If banks, thrifts and other financial institutions experience an increase in effective tax rates under the President's proposal, does the proposal also put the life insurance industry on an equal footing with its competitors? The President's proposal would also make several changes in the way the property and casualty insurance industry is now taxed. I hope that the witnesses will comment on the equity and the administrability of these proposals. I also ask the witnesses to comment on the likelihood that, as a result of this proposal over the next 10 years, we could expect the industry to pay something more than (5889) the few hundred million dollars in Federal taxes they paid in the most recent 10 years. I would like to thank you all for coming today. With the exception of our first panel, and in deference to the witnesses who may have to go on late into the afternoon, the Chair intends to hold both the witnesses and the members of the committee to our 5minute rule. Without objection, all prepared testimony will appear in the record. Also, without objection, all members will be given time to submit additional questions to the witnesses and solicit additional information and answers in writing which can also be made part of the record. Having said that, I would like to recognize our ranking minority member, Mr. Duncan. Mr. DUNCAN. Thank you, Mr. Chairman. Today's hearing allows us to consider issues affecting the life insurance and property and casualty insurance industries. As the members know, the committee in 1983 and 1984 considered in great detail the taxation of the life insurance industry. We didn't, however, consider the taxation of property and casualty insurance industry during this period. Despite our recent consideration of the life insurance industry, the administration is suggesting changes in the way in which the industry is taxed. While I agree with the chairman that nothing should be considered off the table in the context of tax reform, I do believe proposed changes in light of the recent exhaustive review of the industry by the committee should be given some careful consideration. The President and the General Accounting Office have recommended extensive revisions of the provisions governing the taxation of the property and casualty insurance industry. I think these should be viewed in light of several factors, including the overall goal of tax reform to eliminate preferences unnecessarily benefiting single industries, the depressed condition of the property and casualty industry, and the possible impact which enactment of the proposals would have on premium levels and foreign competition. I am confident that our witnesses will be helpful to us in a better understanding of all these matters and I welcome them today and look forward to their testimony. Thank you, Mr. Chairman. Mr. STARK. Our first panel will be extended some additional time due to the technical nature of their presentation. I welcome to the committee Mr. William J. Anderson, the Director of the General Government Division of the General Accounting Office; accompanied by Mr. Natwar M. Gandhi, Group Director, Tax Policy, General Accounting Office. I will let you present your presentation in any manner you choose. |