Taking The Hill
Flat-rate Tax System
A Republican commission led by former Housing Secretary Jack Kemp is calling for replacing the current tax code with a flat-rate tax system. The commission's report advocated the adoption of a tax system in which everyone would be taxed at the same low rate and called for a generous personal exemption, below which income would not be taxed. The report failed to specify what these rates should be. In addition, the commission recommended allowing deductions for investment income such as interest or capital gains and for Social Security and Medicare payroll taxes; allowing deductions for business investments in new buildings and equipment; and keeping the mortgage interest deduction for homeowners. The commission's suggestions will be forwarded to the Senate Finance Committee for further study.Automotive Shock Absorbers
Automotive shock absorbers have been removed from the Department of Transportation's (DOT) list of hazardous materials. Shock absorbers were recently added to the list as part of the new DOT regulations concerning gases, as most modern shock absorbers are gas-charged with a small amount of inert nitrogen gas. The gas is not flammable or toxic, but because it is under pressure, it was included in the new hazardous materials list. The DOT regulation threatened to make shipment of shock absorbers more expensive, thereby driving up consumer costs. Some shippers had refused to transport the shocks altogether as a matter of policy against carrying any goods labeled as hazardous by the federal government. Efforts to overturn the regulation were spearheaded by shock absorber manufacturers who convinced DOT officials that gas-charged shocks pose no threat to safety during transportation.EPA's Self-policing Regulation
The Environmental Protection Agency (EPA) released a final policy statement on its effort to encourage regulated entities to voluntarily discover, disclose and correct violations of environmental requirements. Incentives to those who voluntarily self-disclose and correct violations include eliminating or substantially reducing the gravity component of civil penalties and not recommending cases for criminal prosecution. The policy also restates the EPA's long-standing practice of not requesting voluntary audit reports to trigger enforcement investigations. The policy will be applied uniformly by the agency's enforcement programs and became effective Jan. 22.Product Liability Reform
Despite a furious round of activity to get a consensus on a product liability reform bill, there is still no agreement between House and Senate conferees. Many members are sticking to comprehensive legislation passed last year in the House that would extend reform to all civil actions in both state and federal courts. The Senate measure promised much more modest reform. Under both bills, product sellers would be liable only for their own negligence or failure to comply with an express warranty. However, if the manufacturer could not be brought into court or is unable to pay a judgment, the seller would be liable as if the seller were a manufacturer. It appears unlikely, as the session progresses, that we will see any agreement on product liability reform.
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AutoInc. Magazine ®, Vol. XLIV No. 3, March 1996