Page 758 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Appendix B. Selected Laws 743

• Eliminated in year 2000 the combined limitations on defined-benefit and defined-contribution
plans
• Added safe harbor for early distribution of 401(k) monies due to need
• Stipulated that 10% luxury tax on cars above $30,000 would be eliminated as of January 2003
1997 Taxpayer Relief Act
• Lowered LTCG to 20% if held 18 months; otherwise, 28% (or less for lower brackets) for 12
to 18 months. Also lowered rate to 18% if acquired after 2000 and held for more than five years
• Set AMT at 26% for income up to $175,000 and at 28% above that level
• Eliminated 15% excise tax on excess distributions from qualified retirement plans and increased
cashout limit to $5,000
• Limited company tax deduction on corporate-owned life insurance (COLI)
• Introduced a nondeductible education IRA and a nondeductible (Roth) IRA permitting contri-
butions (reduced by other IRAs) below prescribed earnings level
• Increased child tax credit
• Increased estate tax exemption
1998 IRS Restructuring and Reform Act
• Lowered the LTCG holding period to 12 months retroactive to January 1, 1998
1999 Gramm-Leach-Bliley Act
• Repealed 1933 Glass-Steagall Act
• Allowed banks to sell insurance and stocks; permitted insurance companies entry to banks
2000 Senior Citizens Freedom to Work Act
• Eliminated earnings test requirement to receive social security payments if age 65 or older
2000 Worker Economic Opportunity Act
• Excluded stock options with purchase price of at least 85% FMV from overtime calculations
2000 Electronic Signatures in Global and National Commerce Act
• Declared electronic signatures legally binding for e-commerce transactions
2001 Economic Growth and Tax Reconciliation Act
• Scaled back tax rates, with a maximum tax of 39.1% on income over $297,350 (for 2001–2003),
37.6% on income over $288,350 (for 2004–2005), and 35% on income over $288,350 (for 2006
and later)
• 401(k) contributions increase to $15,000 in 2006
• Credited pay limit for defined benefit plans increased to $200,000
• Reduced estate tax (2001–2009), with elimination in 2010
• Unless provisions are reenacted by Congress, all tax rates in 2011 return to 2001 rates
2002 Sarbanes-Oxley Act
• Created the Public Oversight Board
• Prohibited company loans to executive officers and directors
• Accelerated filing of Forms 3, 4, and 5 and required they be filed electronically with the SEC
• Required company reimbursement of executive awards received before company earnings
restatements
• Prohibited executive officers and directors from selling company stock when such restrictions
existed for 401(k) plans

2003 Jobs and Growth Tax Relief Reconciliation Act
• Lowered maximum tax to 35% on annual income over $311,950
• Reduced maximum tax on dividends to 15% through 2008
• Lowered long-term capital gains tax to 15% through 2008