Congress has passed a $792 billion tax bill that President Clinton has called too expensive and has already vowed to veto. The bill, which would reduce tax rates by one percent across-the-board and eliminate the estate tax, is not expected to be sent to the President until Congress returns from its August recess after Labor Day.
There are several provisions in the bill that would benefit the horse owners and breeders, particularly the reduction in the maximum capital gains tax rate from the present 20% to 15% and the increase in the expense deduction to $30,000. But the provision shortening the capital gains holding period for horses from two years to one was eliminated prior to the vote on the final package.
Congressmen Jerry Weller (R-IL), Ron Lewis (R-KY) and Jim McCrery (R-LA), and Senators Mitch McConnell (R-KY) and Jim Bunning (R-KY) lobbied hard for the shortening of the holding period, which was in the Senate bill, but it was nonetheless deleted from the final bill by the House and Senate Conference Committee.
The President and Democratic leaders have argued that the Republican tax bill is too expensive and that the projected surplus in the U.S. Treasury should be used to expand Medicare and increase spending on domestic programs. The President has promised to veto the current bill, although he has indicated he might consider a smaller bill.
“We can expect another, scaled-back tax bill in the fall,” said Jay Hickey, President of the American Horse Council. “After the time and effort put forth by our Congressional supporters and the industry itself, we are disappointed that the provision shortening the holding period for horses was not included in the tax bill, even in the likelihood of a veto by the President. We must get ready for the second bill now. O