Ron Paul Dear Colleague on Paul Amendment to Bankruptcy Reform Act of 1998
Ron Paul Dear Colleague on Paul Amendment to Bankruptcy Reform Act of 1998
(J. Bradley Jansen was the legislative staffer for Ron Paul on these issues at this time)
HR 3150 (Bankruptcy Reform Act of 1998)
Paul Amendment
What our amendment DOES do:
Reorders list of priorities to make claims of governmental units last.
Within governmental unit claims, sets that a preference will be given “firstly of local governmental units, secondly of State governmental units, and thirdly of all other governmental units.”
(e.g., local school district taxes get paid before the IRS)
(If there is a local or regional economic downturn–with a rise in bankruptcies–these localities will be more dependent on the reduced tax receipts. Amendment acts as a stabilizer leaving tax receipts in depressed areas rather than to DC.)
What our amendment DOES NOT do:
No change in any other priorities such as alimony or child support.
No change in homestead exemptions.
Current law:
“The following expenses and claims have priority in the following order:
[priorities one through seven, then]
(8) allowed unsecured claims of governmental units
(A) tax on income or gross receipts
(B) a property tax
(C ) tax withheld or collected where debtor is liable
(D) employment tax on wage, salary or commission
(E) excise tax
(F) customs duty
(G) penalty related to a claim in compensation for actual pecuniary loss
(9) allowed unsecured claims to Federal depository institutions regulatory agency.”