HOUSE COMMITTEE VOTES TO END OVER 4 YEARS TAX BENFITS FOR MOST AMERICANS WHO WORK OVERSEAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP77M00144R001100070025-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 21, 2016
• Document Release Date: October 12, 2006
• Sequence Number: 25
• Publication Date: October 2, 1975
• Content Type: NSPR

Approved For Release 2006/10/12 : CIA-RDP77M00144RO01100070025-9
THE NEW YORK TIMES
2 October 1975
ouse ,comm i tee o s v ; ;~ Ye''ar 'T
s ax-
forMost Americans Who
ho Work Qve'rs.eas
By EILEEN SHANAHAN
Sp-dal to The \ew York Times
_. WASHINGTON, Oct.' 1--The
house Ways, and, Means Coin-
niittee voted today to terminate
.over a four-year, period the
special tax advantages that are
available Jo, most Americans
who work overseas. An except
lon was-made for persons who+
.vork for charitable;:'education-
at, religious and similar organi
_zations.
About 200,000t 'individt als,'
half of them governmentwork-
ers-and half. employes of pri-
vate'industry,-would have their
Federal income taxes. increased
by'-a total' of."$1e50-miIlion a
year if-?the-, commettee's plan
becomes law.
At the': same : session, .th,e
committee ? voted 30.: to :.5 to
take up four. 'relatively minor
statutory "changes:: affecting
these.companies;;
.
l
It approved the chances after
a fight. over a.proposed amend-('
:Went that would have essential
y eliminated "the impact, of
the changes ori'the oil industry'
and also iliminated $30-million
.of the 5135 million in addition-
al taxes that. the' four changes
would raise
The vote that defeated the at-
tempt to exempt oil'companies
from the change. was 19 to 18.
The- "panels"decision to'go
ahead with the four provisions
The committee took two ac-
tions 'on the tax benefits for
ind ividual'Americans who work
overseas.,!,:.-
Phase-Out in 4 Years
Employes of private industry,
provided they have lived' over-
seas for-17 out of, -.18. consecu-
tie months; are mpt now
from.United States income tax
on the first $20,000..of their.
earnings T
I if they. are bona;,fide 'resi'-
dents of a- foreign`eoi.intry for
three years, the exemption rises
to $25,000. '
The , committee--;"voted toi
four even stages; over the. next
four years. In other words, for
a person now entitled to $20,-
OOO of tax-eicempt income, thel
amounts would decline to $15,-:
000 for 1970, $10,000 for 1977,
$5,000 in 1978 and nothing in?
succeeding years.. ` -
`The "situation for. Federal
Government erployes ' who
work-- in-..foreign countries` is
different: -They receive a com-
.plex' array. of allowances for
transportation-, -educational. ex-
penses; 1,official . entertaining,
cost-of hvint; acustments and,'
ro ,on which. are exempt rro
taxation
affecting the multinationatcom- The ,,.",committee voted t~
Parties, came after .committee Phase 'out.. the ae.~. Pt
members who. yesterday shied status of these allowances--o ye
away- from :.suppo-tting'any- tax a four-year period after hearin
a report .showing .' that there
change affectin these com- was' no; problem ain re6ruitin_
ponies.becamepersuaded that Government workers' for. over
,complete,. failure to_.act. could seas posts. In fact, -there ar
brim about even -harsher legis generally - hundreds 1 of appli-
lotin later'on. ' %r cants for each open spot, "th
-Sopecifically, they- fear was. report showed.
tnat angry liberal Democrats
on Both government and private
the committee tee Demwouldocratic tic industry. employes would re-
Cauc the ceive one new tax advantage
Caucus in n House i the issue, -;is; hap. lunder tine committees bill to\
pened earlier this year on re-
peal of the oil`depletion allow-
ance; and force's vote in th
House floor that'^woudc ?takel
away all the special' tax treat
ment that American com;,anies
get on income" ,from fcrgign
operations.:-.... ;c. ,.. T . P
make.-up in part for what they f
are'.losing. They would be per-:
mitted to .deduct up to $1,200:
!ayear if, they are making tiii
(tion payments for their children
for private schooling in grades,
kindergarten through . high
school. The 'rationale is than
Americans ? working I- overseas
lose the. 'advantage of tax-'
supported .education. for !.heir.
ichil'dren .
The committee's decision to
eliminate most tax benefits for,
!individual Americans workin- -
loverseas contrasted with itsi
-failure to tackle the basic tarx'
benefit- that :~co'rporations get`
from overseas operations. This
is: the fact that profits- earned`
overseas are not. subject to.
American ,income . tax until'
they.,-are,, returned--to. this'
country: .., ,
The committee -voted 23 to
12 to postpone for six months
all consideration of this and
other advantages available to
multinational.corporations,, ex-
cept.for'the'four changes it.
adopted- -today. -- These four
changes' had.' also . been ap
!proved-by the Committee. last".
year in a bill that never reached
-the. I-louse . floor.. , ?- -:
Approved For Release 2006/10/12 : CIA-RDP77M00144RO01100070025-9