106^th Congress Report

2^d Session SENATE 106-

MARRIAGE TAX RELIEF ACT OF 2000

April 4, 2000.--Ordered to be printed

Mr. ROTH, from the Committee on Finance,

submitted the following

R E P O R T

together with

MINORITY VIEWS

[To accompany S. ---]

[Including cost estimate of the Congressional Budget Office]

The Committee on Finance reported an original bill (S. ---) to amend the Internal Revenue Code of 1986 to provide marriage tax relief by providing for adjustments to the basic standard deduction, the 15-percent and 28-percent rate brackets, and the earned income credit, and to fully allow the nonrefundable personal credits against regular and alternative minimum tax liability, having considered the same, reports favorably thereon and recommends that the bill do pass.

CONTENTS

Page

I. LEGISLATIVE BACKGROUND

II. EXPLANATION OF THE BILL

A. Standard Deduction for Married Couples Set at Two Times the

Standard Deduction for Single Individuals (sec. 2)

B. 15-Percent and 28-Percent Rate Tax Brackets for Married

Couples Set at Two Times the Corresponding Tax Brackets for

Single Individuals (sec. 3)

C. Increase the Beginning Point and Ending Point of the Earned Income

Credit Phaseout for Married Couples (sec. 4)

D. Preserve Family Tax Credits from the Alternative Minimum

Tax (sec. 5)

III. BUDGET EFFECTS OF THE BILL

A. Committee Estimates

B. Budget Authority and Tax Expenditures

C. Consultation with the Congressional Budget Office

IV. VOTES OF THE COMMITTEE

V. REGULATORY IMPACT AND OTHER MATTERS

A. Regulatory Impact

B. Unfunded Mandates Statement

C. Tax Complexity Analysis

VI. CHANGES TO EXISTING LAW MADE BY THE BILL

AS REPORTED

VII. MINORITY VIEWS

Committee markup

The Senate Committee on Finance marked up an original bill (the "Marriage Tax Relief Act of 2000") on March 30, 2000, and approved the provisions on March 30, 2000 by a roll call vote of 11 yeas and 8 nays, with a quorum present.

A. Standard Deduction for Married Couples Set at Two Times

the Standard Deduction for Single Individuals

(sec. 2 of the bill and sec. 63 of the Code)

Marriage penalty and marriage bonus in general

A married couple generally is treated as one tax unit that must pay tax on the couple's total taxable income. Although married couples may elect to file separate returns, the rate schedules and other provisions are structured so that filing separate returns usually results in a higher tax than filing a joint return. Other rate schedules apply to single persons and to single heads of households.

A "marriage penalty" exists when the combined tax liability of a married couple filing a joint return is greater than the sum of the tax liabilities of each individual computed as if they were not married. A "marriage bonus" exists when the combined tax liability of a married couple filing a joint return is less than the sum of the tax liabilities of each individual computed as if they were not married.

While the size of any marriage penalty or bonus under present law depends upon the individuals' incomes, number of dependents, and itemized deductions, as a general rule married couples whose incomes are split more evenly than 70-30 suffer a marriage penalty. Married couples whose incomes are largely attributable to one spouse generally receive a marriage bonus.

Under present law, the size of the standard deduction and the tax bracket breakpoints follow certain customary ratios across filing statuses. The standard deduction and tax bracket breakpoints for single filers are roughly 60 percent of those for joint filers.⁽¹⁾ Thus, two single individuals have standard deductions whose sum exceeds the standard deduction for a married couple filing a joint return.

Basic standard deduction⁽²⁾

Taxpayers who do not itemize deductions may choose the basic standard deduction (and additional standard deductions, if applicable), which is subtracted from adjusted gross income ("AGI") in arriving at taxable income. The size of the basic standard deduction varies according to filing status and is indexed for inflation. For 2000, the size of the basic standard deduction for each filing status is shown in the following table:

Table 1.-Basic Standard Deduction Amounts

For 2000, the basic standard deduction for joint returns is 1.67 times the basic standard deduction for single returns.

The Committee is concerned that the present-law income tax code treats married couples unfairly. This inequitable treatment, commonly referred to as the marriage tax penalty, may undermine respect for the family and discourage formation of families. In attempting to alleviate the marriage tax penalty, the Committee is forced to balance several competing principles, such as equal tax treatment of married couples with the same overall income levels as well as the relative tax burdens of single individuals and married couples with the same income.

The Committee believes that an increase in the standard deduction for married couples filing a joint return in conjunction with the other provisions of the bill is a responsible first step towards alleviating the marriage tax penalty and providing marriage tax relief. When fully effective, this provision provides tax relief to approximately 25 million couples filing joint returns, including more than six million returns filed by senior citizens.⁽³⁾

This provision also has the added benefit of simplifying the tax code. Approximately three million couples who currently itemize their deductions will realize the simplification benefits of using the increased basic standard deduction under the bill.⁽⁴⁾

The provision increases the basic standard deduction for a married couple filing a joint return to twice the basic standard deduction for a single individual beginning in 2001. The basic standard deduction for a married taxpayer filing separately will continue to equal one-half of the basic standard deduction for a married couple filing jointly.

The provision is effective for taxable years beginning after December 31, 2000.

Married Couples Set at Two Times the CorrespondingTax Brackets for Single Individuals

(sec. 3 of the bill and sec. 1 of the Code)

To determine regular income tax liability, a taxpayer generally must apply the tax rate schedules (or the tax tables) to his or her taxable income. The rate schedules are broken into several ranges of income, known as income brackets, and the marginal tax rate increases as a taxpayer's income increases. The income bracket amounts are indexed for inflation. Separate rate schedules apply based on an individual's filing status. In order to limit multiple uses of a graduated rate schedule within a family, the net unearned income of a child under age 14 may be taxed as if it were the parent's income. For 2000, the individual regular income tax rate schedules are shown below. These rates apply to ordinary income; separate rates apply to capital gains.

Table 2.--Federal Individual Income Tax Rates for 2000

Reasons for Change

The rate structure in the Code is responsible for causing the greatest dollar amount of marriage tax penalty. After weighing the principles of equal treatment of married couples with the same overall income and the relative tax burdens of singles and couples with the same income, the Committee believes that the rate structure for married couples filing a joint return should be modified. The expansion of the 15-percent and 28-percent rate brackets, in conjunction with the other provisions of the bill, will greatly alleviate the effects of the marriage tax penalty and provide marriage tax relief.

When fully effective, this provision will provide tax relief to 21 million couples filing joint returns including 3 million returns filed by senior citizens.⁽⁶⁾

The provision increases the size of the 15-percent and 28-percent regular income tax rate brackets for a married couple filing a joint return to twice the size of the corresponding rate brackets for a single individual. This increase is phased in over six years as shown in the following table. Therefore, this provision is fully effective (i.e., the size of the 15-percent and 28-percent regular income tax rate brackets for a married couple filing a joint return is twice the size of the corresponding regular income tax rate brackets for an single individual) for taxable years beginning after December 31, 2006.

The provision is effective for taxable years beginning after December 31, 2001.

C. Increase the Beginning Point and Ending Point of the Earned Income

Credit Phaseout for Married Couples

(sec. 4 of the bill and sec. 32 of the Code)

Certain eligible low-income workers are entitled to claim a refundable earned income credit ("EIC") on their income tax return. A refundable credit is a credit that not only reduces an individual's income tax liability but allows refunds to the individual of amounts in excess of income tax liability. The amount of the credit an eligible individual may claim depends upon whether the individual has one, more than one, or no qualifying children, and is determined by multiplying the credit rate by the individual's earned income up to an earned income amount. The maximum amount of the credit is the product of the credit rate and the earned income amount. The credit is phased out above certain income levels. For individuals with earned income (or modified AGI, if greater) in excess of the beginning of the phaseout, the maximum credit amount is reduced by the phase-out rate multiplied by the earned income (or modified AGI, if greater) in excess of the beginning of the phaseout. For individuals with earned income (or modified AGI, if greater) in excess of the end of the phaseout, no credit is allowed. In the case of a married individual who files a joint return, the income for purposes of these tests is the combined income of the couple.

The parameters of the credit for 2000 are provided in the following table.

Table 3.--Earned Income Credit Parameters (2000)

The Committee believes that the present-law EIC phaseout unfairly penalizes some individuals because they receive a smaller EIC when they marry than if they had not married. The Committee believes that this provision will help alleviate the marriage tax penalty and provide marriage tax relief to many families receiving the EIC. Reducing this inequity will also extend the EIC to almost one million married couples who do not currently qualify for the credit.⁽⁷⁾

The provision increases the beginning and ending income levels of the phase-out of the EIC for married couples filing a joint return by $2,500. The beginning and ending income levels of the phase-out of the EIC (including the $2,500 increase for joint returns) will continue to be indexed for inflation, as under present law. The effect of the provision is to increase the EIC for taxpayers in the income phase-out by an amount up to $2,500 times the phase-out rate. For example, for couples with two or more qualifying children, the maximum increase in the EIC as a result of the proposal is $2,500 times 21.06 percent, or $526.50. The provision also expands the number of married couples eligible for the EIC. Specifically, the $2,500 increase makes married couples with earnings up to $2,500 beyond the present-law phase-out eligible for the EIC.

The provision is effective for taxable years beginning after December 31, 2000.

D. Preserve Family Tax Credits from the Alternative Minimum Tax

(sec. 5 of the bill and secs. 24, 26, 32, and 904 of the Code)

In general

Present law provides for certain nonrefundable personal tax credits (i.e., the dependent care credit, the credit for the elderly and disabled, the adoption credit, the child credit, the credit for interest on certain home mortgages, the HOPE Scholarship and Lifetime Learning credits, and the D.C. homebuyer's credit). Except for taxable years beginning during 1998-2001, these credits are allowed only to the extent that the individual's regular income tax liability exceeds the individual's tentative minimum tax, determined without regard to the minimum tax foreign tax credit. For taxable years beginning during 1998 and 1999, these credits are allowed to the extent of the full amount of the individual's regular tax (without regard to the tentative minimum tax). For taxable years beginning during 2000 and 2001, the nonrefundable personal credits may offset both the regular tax and the minimum tax.⁽⁸⁾

An individual's tentative minimum tax is an amount equal to (1) 26 percent of the first $175,000 ($87,500 in the case of a married individual filing a separate return) of alternative minimum taxable income ("AMTI") in excess of a phased-out exemption amount plus (2) 28 percent of the remaining AMTI, if any. The maximum tax rates on net capital gain used in computing the tentative minimum tax are the same as under the regular tax. AMTI is the individual's taxable income adjusted to take account of specified preferences and adjustments. The exemption amounts are: (1) $45,000 in the case of married individuals filing a joint return and surviving spouses; (2) $33,750 in the case of other unmarried individuals; and (3) $22,500 in the case of married individuals filing a separate return, estates and trusts. The exemption amounts are phased out by an amount equal to 25 percent of the amount by which the individual's AMTI exceeds (1) $150,000 in the case of married individuals filing a joint return and surviving spouses, (2) $112,500 in the case of other unmarried individuals, and (3) $75,000 in the case of married individuals filing separate returns or an estate or a trust. These amounts are not indexed for inflation.

Reduction of refundable credits by alternative minimum tax

Refundable credits may offset tax liability determined under present-law tax rates and allow refunds to an individual in excess of income tax liability. However, the refundable child credit (beginning in taxable years beginning after December 31, 2001) and the earned income credit are reduced by the amount of the individual's alternative minimum tax.

The Committee is concerned that many family tax credits are being cut back or eliminated because of the alternative minimum tax. The Committee believes that these nonrefundable personal credits (e.g., the child credit or the HOPE and Lifetime Learning credits) should be preserved from the effects of the minimum tax. Families also should be able to use the refundable credits without limitation by reason of the minimum tax.

This provision will also have the added benefit of simplifying the tax Code. Millions of taxpayers will no longer face the burden of calculating the alternative minimum tax.

The provision permanently extends the present-law temporary provision that allows the nonrefundable personal credits to offset both the regular tax and the minimum tax.⁽⁹⁾

Also, the provision permanently repeals the reduction of the refundable credits by the amount of an individual's alternative minimum tax.

The provisions are effective for taxable years beginning after December 31, 2001.

In compliance with paragraph 11(a) of Rule XXVI of the Standing Rules of the Senate, the following statement is made concerning the estimated budget effects of the provisions of the bill as reported.

The bill, as reported, is estimated to have the following budget effects for fiscal years 2001-2010.

Budget authority

In compliance with section 308(a)(1) of the Budget Act, the Committee states that the provisions of the bill as reported involve no new or increased budget authority.

Tax expenditures

In compliance with section 308(a)(2) of the Budget Act, the Committee states that the revenue-reducing income tax provisions involve increased tax expenditures (See revenue table in Part III.A., above.)

In accordance with section 403 of the Budget Act, the Committee advises that the Congressional Budget office has [has not] submitted a statement on this bill.

In compliance with paragraph 7(b) of Rule XXVI of the Standing Rules of the Senate, the following statements are made concerning the roll call votes in the Committee's consideration of the bill.

Motion to report the bill

The bill was ordered favorably reported by a roll call vote of 11 yeas and 8 nays on March 30, 2000. If proxies were allowed in reporting a measure, the vote would have been 11 yeas and 9 nays. A quorum was present. The vote was as follows:

Yeas - Senators Roth, Grassley, Hatch, Murkowski, Nickles, Gramm, Lott, Jeffords, Mack, Thompson, Coverdell.

Nays - Senators Moynihan, Baucus, Rockefeller, Breaux, Conrad, Graham, Bryan, Kerrey (proxy), Robb.

Votes on other amendments

An amendment in the nature of a substitute by Senator Moynihan to allow married couples to file as two single filers on the same return was defeated by a roll call vote of 9 yeas and 11 nays. The vote was as follows:

Yeas - Senators Moynihan, Baucus, Rockefeller, Breaux, Conrad (proxy), Graham, Bryan, Kerrey (proxy), Robb.

Nays - Senators Roth, Grassley (proxy), Hatch, Murkowski (proxy), Nickles, Gramm (proxy), Lott, Jeffords, Mack, Thompson, Coverdell.

An amendment by Senators Graham and Robb to delay the effective date of the tax relief until after the enactment of legislation that extends the solvency of the Social Security trust fund until 2075 and the Medicare Part A program through 2025 was defeated by a roll call vote of 9 yeas and 11 nays. The vote was as follows:

Yeas - Senators Moynihan, Baucus, Rockefeller, Breaux, Conrad, Graham, Bryan, Kerrey (proxy), Robb.

Nays - Senators Roth, Grassley, Hatch, Murkowski (proxy), Nickles, Gramm, Lott, Jeffords, Mack, Thompson, Coverdell.

Pursuant to paragraph 11(b) of Rule XXVI of the Standing Rules of the Senate, the Committee makes the following statement concerning the regulatory impact that might be incurred in carrying out the provisions of the bill as reported.

Impact on individuals and businesses

The bill: (1) increases the basic standard deduction for married couples filing a joint return; (2) increases the width of the 15-percent and 28-percent rate brackets for married couples filing a joint return; (3) increases the beginning and ending points of the phaseout of the earned income credit for married couples filing a joint return; and (4) permanently extends the provision that allows the nonrefundable personal credits to offset both the regular tax and the minimum tax and permanently repeals the reduction of the refundable credits by the amount of an individual's alternative minimum tax. These provisions will reduce the tax burden on affected individual taxpayers. The bill will have no impact on businesses.

Impact on personal privacy and paperwork

The bill should not have any adverse impact on personal privacy. No additional paperwork will be required by the provisions of the bill.

This information is provided in accordance with section 423 of the Unfunded Mandates Act of 1995 (P.L. 104-4).

The Committee has determined that the bill does not contain Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental mandate on State, local, and tribal governments.

The following tax complexity analysis is provided pursuant to section 4022(b) of the Internal Revenue Service Reform and Restructuring Act of 1998, which requires the staff of the Joint Committee on Taxation (in consultation with the Internal Revenue Service ("IRS") and the Treasury Department) to provide a complexity analysis of tax legislation reported by the House Committee on Ways and Means, the Senate Committee on Finance, or a Conference Report containing tax provisions. The complexity analysis is required to report on the complexity and administrative issues raised by provisions that directly or indirectly amend the Internal Revenue Code and that have widespread applicability to individuals or small businesses. For each such provision identified by the staff of the Joint Committee on Taxation, a summary description of the provision is provided, along with an estimate of the number and the type of affected taxpayers, and a discussion regarding the relevant complexity and administrative issues.

Following the analysis of the staff of the Joint Committee on Taxation are the comments of the IRS regarding each of the provisions included in the complexity analysis, including a discussion of the likely effect on IRS forms and any expected impact on the IRS.

1. Standard deduction tax relief (sec. 2 of the bill)

Summary description of provision

The bill increases the basic standard deduction for a married couple filing a joint return to twice the basic standard deduction for an unmarried individual for taxable years beginning after December 31, 2000.

Number of affected taxpayers

It is estimated that the provision will affect approximately twenty five million individual tax returns.

Discussion

It is not anticipated that individuals will need to keep additional records due to this provision. The higher basic standard deduction should not result in an increase in disputes with the IRS, nor will regulatory guidance be necessary to implement this provision. In addition, the provision should not increase individuals' tax preparation costs.

Some taxpayers who currently itemize deductions may respond to the provision by claiming the increased standard deduction in lieu of itemizing. According to estimates by the staff of the Joint Committee on Taxation, approximately three million individual tax returns will realize greater tax savings from the increased standard deduction than from itemizing their deductions. In addition to the tax savings, such taxpayers will no longer have to file Schedule A to Form 1040 or need to engage in the record keeping inherent in itemizing below-the-line deductions. Moreover, by claiming the standard deduction, such taxpayers may qualify to use simpler versions of the Form 1040 (i.e., Form 1040EZ or Form 1040A) that are not available to individuals who itemize their deductions. These forms simplify the return preparation process by eliminating from the Form 1040 those items that do not apply to a particular taxpayer.

This reduction in complexity and record keeping may also result in a decline in the number of individuals using a tax preparation service (or a decline in the cost of using such a service). Furthermore, if the provision results in a taxpayer qualifying to use one of the simpler versions of the Form 1040, the taxpayer may be eligible to file a paperless Federal tax return by telephone. The provision also should reduce the number of disputes between taxpayers and the IRS regarding substantiation of itemized deductions.

2. Expansion of the 15-percent and 28-percent rate bracket for married couples filing a joint return (sec. 3 of the bill)

Summary description of provision

The provision increases the size of the 15-percent and 28-percent regular income tax rate brackets for married couple filing a joint return to twice the size of the corresponding rate brackets for an unmarried individual. This increase is phased in over six years beginning for taxable years beginning after December 31, 2001. It is fully effective for taxable years beginning after December 31, 2006.

Number of affected taxpayers

It is estimated that the provision will affect approximately twenty-one million individual tax returns.

Discussion

It is not anticipated that individuals will need to keep additional records due to this provision. The increased size of the 15-percent and 28-percent regular income tax rate brackets for married couples filing joint returns should not result in an increase in disputes with the IRS, nor will regulatory guidance be necessary to implement this provision.

3. Interactive effect of the alternative minimum tax rules

Both provisions (i.e., the standard deduction tax relief and the expanded 15-percent and 28-percent rate brackets) are affected by the alternative minimum tax ("AMT") rules. Specifically, because neither provision makes corresponding changes to the alternative minimum tax regime other than the allowance of the nonrefundable personal credits against the AMT, additional individual taxpayers will need to make the necessary calculations to determine the applicability of the alternative minimum tax rules. It is estimated that for the year 2005, less than two million additional individual income tax returns who benefit from the provisions will be required to include a calculation of the tentative minimum tax and file the appropriate alternative minimum tax forms. By the year 2009, this number is expected to rise to over seven million additional individual income tax returns. At the same time, however, by 2009, there will be approximately two million individual income tax returns who will be alleviated the burden of the AMT calculations by virtue of the extension of the nonrefundable personal credits against the AMT.

For taxpayers who have to calculate the tentative minimum tax and file the appropriate alternative minimum tax forms, it could be expected that the interaction of the provisions with the alternative minimum tax rules would result in an increase in tax preparation costs and in the number of individuals using a tax preparation service.

[insert letter]

[Insert] OR

[In the opinion of the Committee, it is necessary in order to expedite the business of the Senate, to dispense with the requirements of paragraph 12 of Rule XXVI of the Standing Rules of the Senate (relating to the showing of changes in existing law made by the bill as reported by the Committee).]

VII. MINORITY VIEWS

Democratic Members of the Committee strongly support marriage penalty relief. However, the bill presented to the Committee is costly, inefficient, and fails to eliminate the marriage penalty. We, therefore, cannot support its enactment. Specifically, Democratic members of the Committee have the following objections to the bill.

First, many Democratic members believe the best thing we can do with on-budget surpluses is to pay down the federal debt. All Democratic members agree that if we are going to have tax cuts, we should consider them in a comprehensive fashion that allows us to weigh priorities. Although the expected 10-year budget surplus is only $893 billion, $395 billion in tax cuts have already passed one chamber or the other, including the House marriage penalty proposal. Assuming the Senate passes the marriage penalty bill as reported out of the Finance Committee, the total amount of tax cuts under consideration will rise to $461 billion. If all of those tax cuts were signed into law, the debt service costs associated with these bills would total approximately $105 billion, leaving a remaining on-budget surplus of $327 billion. Before we decide to spend over half of the projected non-Social Security surplus on these tax cuts, we should develop a budget framework that would allocate sufficient funds for reducing the debt held by the public, bolstering Medicare and Social Security, and investing in other priority programs.

Second, while several of the bill's provisions have merit as a tax policy matter, the bill is not targeted at eliminating the marriage penalty. Instead, the standard deduction and bracket expansion proposals would increase the marriage bonus for millions of couples. The Department of Treasury's analysis of the bill indicates that over half of the benefits of the bill would go to taxpayers already receiving a marriage bonus.

Third, the bill does not comprehensively address the marriage penalty. Of the 65 known provisions in the tax code which have a marriage penalty effect, the Committee-passed bill eliminates only one and partially addresses two more. If the committee bill were enacted, we would still have made little progress in eliminating discrimination in the tax code based on marital status.

Finally, because the bill does not completely extend its marriage penalty relief to the alternative minimum tax (the "AMT"), some 5 million additional taxpayers would become subject to the AMT as a result of the legislation.

By contrast, the marriage penalty relief proposal offered by Democratic Finance Committee members addresses the problem of the marriage penalty in a targeted, fiscally responsible fashion. Democrats believe, first of all, that if we say we are going to address the marriage penalty, we must do it comprehensively. The Democratic alternative, which failed on a party line vote of 9-11, would give married couples the option of calculating their tax liability as single individuals or as a couple. When fully phased in (in 2010), this approach would eliminate the marriage penalty by allowing couples to choose to file as two single taxpayers if that status benefits them. Optional separate tax liability calculations would address all aspects of the marriage penalty, including penalties associated with such divergent matters as the taxation of Social Security benefits, education tax incentives, and retirement savings. Moreover, this proposal eliminates the penalty inherent in the Earned Income Tax Credit (the "EITC")-- the most severe marriage penalty in the tax code -- which creates a substantial disincentive to marry among EITC beneficiaries. Finally, the benefits of this approach would also extend to the AMT and would not expand marriage bonuses.

The option to calculate tax liability as single individuals is not a new concept. Nine states and the District of Columbia allow married couples to pay taxes on their separate incomes as if they were single. And in 1994, 19 of the 27 OECD countries provided one rate schedule whether taxpayers were married or single. Countries such as Canada, Australia and the United Kingdom treat each individual as a taxpaying unit. Thus, in those countries marriage has little effect on the couple's tax liability.

The Democratic marriage penalty proposal eliminates the marriage penalty in a fiscally responsible manner that allows room for other priorities - tax and non-tax - later in the year. The total cost of the Democratic marriage penalty proposal is approximately $150 billion over 10 years, compared to the Senate GOP proposal, which costs $248 billion over 10 years. If we are to address the issue, we should do so comprehensively and responsibly. We urge the Senate to consider the alternative proposed by Finance Committee Democrats.

Daniel Patrick Moynihan

Max Baucus

John D. Rockefeller IV

John B. Breaux

Kent Conrad

Bob Graham

Richard H. Bryan

Robert J. Kerrey

Charles S. Robb

1. This is not true for the 39.6-percent rate. The beginning point of this rate bracket is the same for all taxpayers regardless of filing status.

2. Additional standard deductions are allowed with respect to any individual who is elderly (age 65 or over) or blind.

3. Source: Joint Committee on Taxation staff projections of the number of tax returns affected.

4. Source: Joint Committee on Taxation staff projections of the number of tax returns affected.

5. Married individuals filing separately must apply a separate rate structure with tax rate brackets one-half the width of those for married individuals filing joint returns.

6. Source: Joint Committee on Taxation staff projections on the number of tax returns affected.

7. Source: Joint Committee on Taxation staff projections of the number of tax returns affected.

8. The foreign tax credit is allowed before the personal credits in computing the regular tax for these years.

9. The foreign tax credit will continue to be allowed before the personal credits in computing the regular tax.