Highlights of the tax bill passed by the House yesterday.
$10.5 billion in reductions for individuals, primarily through reshuffing existing tax brackets, cutting rates and raising the personal exemption and standard deduction.
The bill would boost to $1,000 the $750 personal exemption now allowed every taxpayer and dependent. The standard deduction would jump by $100 - to $2,300 for single persons and $3,200 for couples!
$1.8 billion in cuts in capital gains taxes, including a once-a-life-time chance to escape payment of taxes on the first $100,000 of profits from selling a home.
Besides the break for homeowners, these cuts would exempt capital gains from the 15 percent "minimum tax" and the 50 percent "maximum tax" and would impose a new 10 percent alternative tax on gains.
The bill also would create an automatic inflation adjustment for taxes on capital gains, which are profits from the sale of stocks or other property.
$3.8 billion in tax cuts for businesses, stemming from a reduction in corporate rates, a new graduated rate schedule for small business and a liberalization of the tax credit for investment.
The corporate rate would be cut from 48 percent to 46 percent. The investment credit would be expanded to cover rehabilitation of existing structures. And firms could use the credit to offset 90 percent of other taxes.
A new streamlined version of the job creation tax credit Congress passed two years ago, this one "targeted" to encourage businesses to hire inner-city youths.
A handful of relatively minor "reforms," including an end to the deductibility of state and local gasoline taxes.