Acts on Eskimo Aid, Burial Insurance Policies : Senate Moves Closer to Clearing Tax Bill

The Senate, moving to clear the way for final approval of the tax overhaul bill on Tuesday, plowed through a host of minor issues Friday, ranging from exempting Eskimos from paying taxes on a reindeer herd to assuring that burial insurance policies remain tax-free.

“This is the every-man-for-himself stage,” said Sen. Dave Durenberger (R-Minn.) in describing the dozens of amendments proposed by various lawmakers. “Everybody has to put on some kind of a show that they’re doing something.”

Amnesty Plan Cut

In the most significant actions of the day, the Senate agreed to eliminate a modest tax amnesty proposal and accepted a provision allowing severely handicapped workers to continue to deduct job-related expenses.

Senate Majority Leader Bob Dole (R-Kan.), a disabled World War II veteran, introduced the amendment for the handicapped, which would allow severely disabled workers to continue to deduct job-related expenses for attendants, equipment and other special help they need to remain employed.

Loss of Job Chances

“Often these expenses are so large,” said Dole, “that absent the deduction a handicapped individual might be unable to afford to take a job that would otherwise be possible.”

Dole, who has been an advocate for the disabled and has established a foundation that raises money for the handicapped, cited a letter from a quadriplegic lawyer who pointed out that the elimination of deductions for most employee business expenses in the Senate tax bill could make it nearly impossible for her to continue working.

Long’s Proposal Wins

The amendment, which also included a provision sponsored by Sen. Russell B. Long (D-La.) to keep burial insurance policies under $5,000 tax-free, was approved on a voice vote.

A large portion of the day was consumed by complex parliamentary maneuvering that culminated in the elimination of a provision that would have exempted tax avoiders from criminal prosecution if they voluntarily come forward to pay their taxes.

“This is an entitlement program for criminals,” argued Sen. Dale Bumpers (D-Ark.), who successfully pushed an amendment to strike any hint of tax amnesty from the tax bill.

Lawmakers defending the amnesty provision argued that it would do little more than explicitly state the current, unwritten rules of the Internal Revenue Service.

“All this program does is codify existing practice,” Sen. John Kerry (D-Mass.) said.

In the rush to complete action on the tax bill now that the Senate has formally agreed to a final vote on Tuesday afternoon, lawmakers approved an array of special provisions for particular groups.

Late Thursday evening, for example, the Senate adopted a measure to permit farmers to receive cash refunds of up to $750 for some of their unused investment tax credits. The amendment, similar to a controversial provision in the bill allowing steel companies to receive cash from the government for unused ITCs, was pushed by Sen. Max Baucus (D-Mont.).

‘Can Do It for Farmers’

“If we can do it for steel, we certainly can do it for farmers,” Baucus said. “The steel industry is in tough shape, but so are our farmers.”

Although few significant changes have been made to the tax bill on the Senate floor, lawmakers have succumbed in several cases to amendments that benefit the farm belt.

Sen. Ted Stevens (R-Alaska), who complained bitterly Wednesday night about the bill’s poor treatment of his state, won Senate approval for an amendment insuring that Eskimos’ income from their reindeer remains tax-exempt.

Meanwhile, more information has emerged about a special tax break arranged by Sens. William L. Armstrong (R-Colo.) and David L. Boren (D-Okla.), senior members of the Finance Committee, for the investors in Cimarron Coal Co. of Colorado. When Sen. Howard M. Metzenbaum (D-Ohio) unsuccessfully challenged the $2-million “transition rule” earlier this week, he incorrectly said only two unidentified individuals would benefit from the preference.

Since then, various newspaper reports have disclosed that a total of four individuals and their families stand to benefit from the special exception for Cimarron Coal. Among them is Edward L. Gaylord, president of Oklahoma Publishing Co., which publishes the Daily Oklahoman in Oklahoma City.

Senator Paid $100,000

Senate records show that last year the Oklahoma Publishing Co. paid Armstrong more than $100,000 to clear a promissory note he has held since he sold the Colorado Springs Sun newspaper to the company in 1977. That information was first disclosed by Scripps Howard News Service.

Armstrong, defending the tax break as a legitimate transition rule to prevent Cimarron Coal owners from being caught by the sudden tax change, said there was no relation between his sponsorship of the measure and the income received up until August last year on the note he held for the sale of the newspaper.