Highlights of the tax-revision bill that the House passed last night:

Four tax rates of 15 percent, 25 percent, 35 percent and 38 percent would replace the current 14 brackets with rates ranging from 11 percent to 50 percent. The bill would raise the personal exemption, currently $1,040 for taxpayers and dependents, to $1,500 for those who itemize their tax deductions and to $2,000 for taxpayers who use the standard deduction.

The standard deduction would be increased, especially for single parents. The double exemption for the elderly would be replaced by an additional standard deduction of $600, and the credit for low-income elderly and blind would be retained.

The tax deduction for two-earner couples designed to offset the "marriage penalty" would be repealed, although the tax rates for married couples would be structured to offset some of that loss. Income averaging would be repealed, and the tax credit for low-income workers, called the earned income tax credit, would be enlarged.

All state and local taxes would remain fully deductible, as would charitable contributions for those who itemize their deductions. Nonitemizers, who this year can deduct half their contributions, could instead write off the amount of their contributions minus $100.

Employer-provided fringe benefits, such as premiums for health insurance, would remain untaxed, but unemployment compensation would become fully taxable. Tax-deferred Individual Retirement Accounts would continue to be deductible for contributions of up to $2,000 per year for a worker and $250 for a nonworking spouse. But if the employe also has an employer-sponsored 401(k) savings plan, every dollar put into the 401(k) would offset the allowable contributions to an IRA by one dollar.

New federal retirees would have to pay taxes on a portion of their pensions immediately upon retirement, rather than deferring the taxable portion for up to three years as they do now.

Under the bill, nonbusiness interest deductions for taxpayers would be limited to the sum of $20,000 for a couple ($10,000 for a single person) plus the mortgage interest on two homes plus an amount equal to investment income for the year.

The amount of capital gains -- profits from the sale of an asset -- that could be excluded from income would be 42 percent instead of the current 60 percent. That would make the top capital gains tax rate 22 percent, compared with the 20 percent it is now.

A new 25 percent minimum tax would require many more individual and corporate taxpayers to calculate their income twice to see if this tax applies. The first $40,000 of taxable income would be exempt for married taxpayers; the first $30,000 for single taxpayers. The tax still would affect far more individual and corporate taxpayers than the current minimum levy. The top corporate tax rate, which would cover most businesses, would be 36 percent. The current top rate is 46 percent. Rates would be lower for small business.

Most kinds of business entertainment, such as meals and sports tickets, would remain deductible, but the deduction would be limited to 80 percent of those costs. Currently, they are fully deductible.

The bill would require companies to write off the costs of investment in equipment and real estate over longer periods of time, reducing the deduction they can take each year. The investment tax credit, which pays for up to 10 percent of the cost of investment in new equipment, would be repealed.

Companies could deduct from income 10 percent of the cost of dividends they pay out, but only after a phase-in period of 1 percentage point per year. The tax credits for research and for rehabilitation of old and historic buildings would be retained but scaled back.

Some tax advantages for oil and gas drilling would be retained, but the bill would cut back tax breaks for timber, banking, minerals, tax-exempt bonds, defense and construction contracting and insurance.