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HR 4210 - Tax Reform - National Key Vote

Stage Details

Title: Tax Reform

Vote Smart's Synopsis:

Vote to pass a bill that amends the federal tax code by establishing and extending tax credits and increasing taxes on specific income brackets.

Highlights:

- Establishes the following income tax rates for married couples filing a joint return [sec. 3001 (a)]:

    - Incomes over $86,500 but not more than $175,000: $19,566 plus 31 percent of income in excess of $86,500; and - Incomes over $175,000: $47,001 plus 36 percent of income in excess of $174,000.
- Establishes the following income tax rates for heads of households [sec. 3001 (b)]:
    - Incomes over $71,150 but not more than $162,500: $17,024.50 plus 31 percent of income in excess of $74,150; and - Incomes over $162,500: $44,413 plus 36 percent of income in excess of $161,500.
- Establishes the following income tax rates for unmarried individuals [sec. 3001 (c)]:
    - Incomes over $51,900 but not more than $150,000: $11,743.50 plus 31 percent of income in excess of $51,900; and - Incomes over $150,000: $42,154.50 plus 36 percent of income in excess of $150,000.
- Establishes the following income tax rates for married individuals filing separate returns [sec. 3001 (d)]:
    - Incomes over $43,250 but not more than $87,500: $9,783 plus 31 percent of income in excess of $43,250; and - Incomes over $87,500: $23,500.50 plus 36 percent of income in excess of $87,500.
- Establishes the following income tax rates for estates and trusts [sec. 3001 (e)]:
    - Incomes of $3,500 or less: 15 percent; and - Incomes over $3,500: $525 plus 36 percent of income in excess of $3,500.
- Imposes a 10.04 percent surtax on incomes exceeding $1 million per taxable year, and a 2.4 percent surtax on alternate minimum taxable income in excess of $1 million per year (Sec. 3002). - Imposes a 10 percent luxury excise tax on the first retail sale of an automobile if such price exceeds $30,000. The tax may be annually increased to adjust to inflation and is repealed on January 1, 2000 [sec. 2501 (4001)]. - Establishes a tax credit equal to 15 percent of an individual's amount paid on interest for education loans, limited to $300 and applicable to payments made on interest accrued during the first 48 months of the loan (Sec. 2121). - Establishes a child tax credit equal to $300 per child that may be annually increased to adjust to inflation, and may be reduced for taxpayers earning more than $47,500 (Sec. 1001). - Postpones the termination of the low-income housing tax credit and targeted jobs tax credit until December 31, 1993 (Secs. 1003 & 2432). - Allows employers to exclude from gross income amounts associated with transportation fringe benefits provided to employees, including carpools, transit passes, or special parking. The amount is capped at $60 per month, or $160 in the case of qualified parking (Sec. 1005). - Makes permanent the deduction for health insurance costs for self-employed individuals and increases the deduction amount from 25 to 75 percent beginning in 1992 (Sec. 2201). - Establishes a special depreciation allowance for equipment acquired as investment property between February 1, 1992 and January 1, 1993 equal to 10 percent of the adjusted basis of the equipment, which is the original price plus the cost of improvements minus any depreciation (Sec. 2501). - Allows for penalty-free withdrawals of up to $10,000 from qualified retirement plans to be used for a first-time home purchase, excluding married couples filing a joint return that earn over $100,000 per year, married individuals filing separate returns that earn over $50,000 per year, and other taxpayers earning over $75,000 per year (Sec. 2023). - Allows individuals to exclude from gross income up to 50 percent of any gain from investments in the stock of a small business issued after February 1, 1992 and held for more than five years [sec. 2311 (1202) (a-b)]. - Allows taxes to be paid by credit card (Sec. 4102). - Allows a tax exempt title-holding company to receive unrelated business taxable income of up to 10 percent of its gross income if it is derived from the holding of real property (Sec. 2423). - Excludes from unrelated business taxable income any gains from the sale, exchange or other disposition of real property acquired from financial institutions that are in conservatorship or receivership (Sec. 2424). - Prohibits any political subdivision, such as a state or city, from imposing an income tax on the pension or retirement income of an individual who is not a resident of that political subdivision (Sec. 4248). - Requires a 10 percent reduction in federal funds for aid to families with dependent children to any State that is providing general welfare assistance to able-bodied individuals who are over the age of 18, have no dependents, and are not participating in a workfare program (Sec. 6003). - Limits the amount of aid to families with dependent children an individual can receive during his or her first year of residency in a state to the lesser of: (1) the amount the individual could have received in his or her former State of residence, or (2) the amount the individual could receive in the new state (Sec. 6004).

Title: Tax Reform

Vote Smart's Synopsis:

Vote to pass a bill that amends the federal tax code by establishing and extending tax credits, increasing taxes on specific income brackets, and providing incentives for business retention and expansion in economically distressed areas.

Highlights:

- Imposes a 35 percent tax rate for unmarried individuals earning over $85,000 per year and for married individuals filing separate returns earning over $72,500 per year [sec. 3001 (c-d)]. - Imposes a 10 percent surtax on incomes exceeding $1 million per year, and a 2.5 percent surtax on alternative minimum taxable income in excess of $1 million per year (Sec. 3003). - Imposes a 10 percent luxury excise tax on the first retail sale of an automobile, if such price exceeds $30,00. The tax may be annually increased to adjust to inflation and is repealed on January 1, 2000 [sec. 2501 (4001)]. - Establishes a tax credit equal to 20 percent of an individual's social security taxes, capped at $200 for individual returns and $400 for joint returns, and applicable for the years 1992 through 1993 (Sec. 1001). - Establishes a tax credit equal to 15 percent of an individual's amount paid on interest for education loans, applicable for up to five years (whether or not consecutive) beginning January 1, 1992, and caps the credit at the following amounts (Sec. 1002):

    - $300 for interest rates below 10 percent; - $350 for interest rates of at least 10 but less than 11 percent; - $400 for interest rates of at least 11 but less than 12 percent; - $450 for interest rates of at least 12 but less than 13 percent; and - $500 for interest rates of 13 percent or greater.
- Makes permanent the low-income housing tax credit and targeted jobs tax credit, originally set to expire on June 30, 1992 (Secs. 2302-2303). - Allows employers to exclude from gross income amounts associated with transportation fringe benefits provided to employees, including carpools, transit passes, or special parking. The amount is capped at $60 per month, or $160 in the case of qualified parking (Sec. 1005). - Extends the deduction for health insurance costs for self-employed individuals from June 30, 1992 to December 31, 1992 (Sec. 1006). - Establishes a special depreciation allowance for equipment acquired as investment property between February 1, 1992 and January 1, 1993 equal to 15 percent of the adjusted basis of the equipment, which is the original price plus the cost of improvements minus any depreciation (Sec. 2002). - Allows for penalty-free withdrawals of up to $10,000 from qualified retirement plans to be used for a first-time home purchase (Sec. 1003). - Allows individuals to exclude from gross income up to 50 percent of any gain from investments in the stock of a small business issued after February 1, 1992 and held for more than five years [sec. 2102 (1202)(a-b)]. - Establishes a program to provide incentives for the creation of tax enterprise zones to assist economically distressed areas by encouraging business retention and expansion through such measures as [sec. 2602 (1392) (c)]:
    - Reducing tax rates or fees; - Increasing the level or efficiency of public services; - Giving special preference to contractors owned and operated by minorities; - Giving or selling below fair market value surplus land to neighborhood organizations agreeing to operate a business on the land; - Establishing a program under which employers may purchase health insurance for their employees on a pooled basis; - Giving preference to low-income housing projects in tax enterprise zones when allocating the State housing credit; and - Giving preference to facilities located in tax enterprise zones in the allocation of the State ceiling on private activity bonds.
- Establishes an enterprise zone employment credit for small employers equal to 7.5 percent of wages paid during the taxable year, applicable for the first five years of an individual's employment. Individuals earning over $30,000 per year are excluded from classification as enterprise zone employees [sec. 2602 (1394) (a) & (c)]. - Allows taxes to be paid by credit card (Sec. 4104). - Allows a tax exempt title-holding company to receive unrelated business taxable income of up to 10 percent of its gross income if it is derived from the holding of real property (Sec. 2213). - Excludes from unrelated business taxable income any gains from the sale, exchange or other disposition of real property acquired from financial institutions that are in conservatorship or receivership (Sec. 2214).

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