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A bill that would make it possible for computer companies to donate thousands of computers to schools, by increasing the tax deduction for such a contribution, was criticized as bad tax policy recently by John E. Chapoton, assistant secretary of the treasury.

Mr. Chapoton, testifying before the Senate subcommittee on taxation and debt management, said that the "Technology Education Act of 1982" bill would "permit a favored corporation to obtain three times the benefit from its contribution of computers ... than could be obtained by a corporation donating cash or other types of property for such worthy causes as cancer research."

The bill--introduced by Representative Fortney H. (Pete) Stark, Democrat of California--would amend the Internal Revenue Code of 1954 to allow manufacturers donating computers to schools to claim a deduction of up to 30 percent of their taxable income.

The bill would allow the company to deduct up to twice the cost of what is invested in manufacturing the computer. Present law limits the deduction to cost, up to 10 percent of taxable income.

Mr. Chapoton said computer companies could also gain financially from the bill by obtaining service contracts with the schools to which the computers are donated and by promoting sales to students' families.

Steven P. Jobs, chairman of Apple Computer, testified in favor of the bill, saying it is important to preserving America's strength in the emerging technological society.

The House of Representatives last week approved a bill that will provide an additional $1.3 billion for the Guaranteed Student Loan program during this fiscal year.

The emergency appropriation was requested by the Reagan Administration last February when it became evident that rising interest rates would drive the program's cost well beyond its originally estimated fiscal 1982 price tag of $1.8 billion.

Administration officials had asked Congress to approve only an additional $978 million for the subsidized student loans this year.

The Administration had hoped to achieve additional savings in the program this year by requiring graduate and professional students to borrow at higher interest rates under a new loan program.

The measure will now be considered by the Senate.

Vol. 01, Issue 34

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