Word: taxed
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Dates: during 1980-1989
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Legislators have called the proposed budget financially unsound because of its dependence on a $604 million tax hike that Dukakis proposed last month. Opponents of the plan also criticized its provision for $495 million in savings that includes a plan to recover $227 million by tightening Medicaid eligibility...
Thanks to hefty tax breaks that the Government allows for ESOPs, investors who launch a takeover can reduce their borrowing costs if they set aside part of the stock for employees. At the same time, corporations seeking to repel raiders can use an ESOP as a way to put a chunk of the company into relatively friendly hands. "Every corporate treasurer is looking at it," says Paul Mazzilli, a principal at the Morgan Stanley investment firm. In recent months, three major corporations -- J.C. Penney, Ralston Purina and Texaco -- spent a total of $1.75 billion on ESOPs to shore up their...
...tax incentive allows a company sponsoring an ESOP to deduct not only the interest on the loan to buy stock for the plan but also the principal. Another tax break gives banks and other lenders a 50% deduction on their income from ESOP loans, which enables them to charge lower interest rates to companies that borrow for such programs. "These are the kinds of tax incentives that corporate owners dream of," says ESOP expert Joseph Blasi of California Polytechnic State University in San Luis Obispo...
...ESOP surge has raised some eyebrows in Congress. For one thing, ESOPs were never intended as a way for corporate managers to entrench themselves against takeover bids or for corporate raiders to enrich themselves. For % another, the cost of providing the tax breaks is running as high as $3 billion a year at a time when deficit cutting is urgent...
Despite the presidential-congressional sparring of the Reagan years, insiders say that Bush and the Democratically-controlled Congress will be able to reach a compromise measure for deficit reduction, even if it is a politically unpopular tax increase. Congressional leaders like Gradison, the ranking Republican on the House Appropriations Committee, note that Congress is as committed to a balanced budget as the president...