Signed by President Bill Clinton

Vote Smart's Synopsis:

Vote to adopt a conference report on a bill that provides a net tax decrease over the next ten years.

Highlights:

• Lowers net taxes by $95.2 billion over 5 years and $275 billion over 10 years.

• $39 billion in tax incentives for education, including $1,500 credit per-student for each of the first two years of college.

• $500 per child tax credit for single parents with an income less than $75,000 or couples with a joint income of $110,000 or less.

• Creates Individual Retirement Accounts with non-deductible contributions and tax-free earned interest (Roth IRA's).

• Reduces maximum capital gains tax rate from 28% to 20%.

• Raises federal estate tax exemption from $600,000 to $1 million over 10 years.

• Designates entire gas tax for the Highway Trust Fund.

• Changes alternative minimum tax for large corporations and eliminates it for small businesses.

• Increases availability of penalty-free and tax-free withdrawals from Individual Retirement Accounts in order to fund higher education.

• Allows ethanol tax credit to expire on September 30, 1999.

Full Bill Text

Vote Smart's Synopsis:

Vote to adopt a conference report on a bill that provides a net tax decrease over the next ten years.

Highlights:

• Lowers net taxes by $95.2 billion over 5 years and $275 billion over 10 years.

• $39 billion in tax incentives for education, including $1,500 credit per-student for each of the first two years of college.

• $500 per child tax credit for single parents with an income less than $75,000 or couples with a joint income of $110,000 or less.

• Creates Individual Retirement Accounts with non-deductible contributions and tax-free earned interest (Roth IRA's).

• Reduces maximum capital gains tax rate from 28% to 20%.

• Raises federal estate tax exemption from $600,000 to $1 million over 10 years.

• Designates entire gas tax for the Highway Trust Fund.

• Changes alternative minimum tax for large corporations and eliminates it for small businesses.

• Increases availability of penalty-free and tax-free withdrawals from Individual Retirement Accounts in order to fund higher education.

• Allows ethanol tax credit to expire on September 30, 1999.

Full Bill Text

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that provides a net tax decrease over the next ten years.

Highlights:

• Amends the Internal Revenue Code to allow a tax credit of up to $500 for each of a taxpayer's qualifying children.

• Permits total aggregate tax deduction of up to $40,000 for higher education expenses that have already been paid for.

• Waives the 10 percent withdrawal tax on Individual Retirement Account (IRA) distributions if the withdrawal is used to pay higher education expenses.

• Establishes the American Dream (AD) IRA, limits contributions to $2,000 annually, and prohibits deductions for contributions to an AD IRA.

• Increases the unified estate and gift tax credit to $1 million by the year 2006.

• Postpones certain tax-related deadlines if taxpayers are affected by a Federal disaster.

• Amends the Tariff Act of 1930 to suspend taxes on the repair of certain vessels for 1 year.

• Changes the rules regarding corporate shareholder's basis in stock to state that if the untaxed portion of extraordinary dividends received is greater than the basis, it will be treated as a profit for that taxable year.

• Revises the means of translating foreign taxes into dollars by using the average exchange rate for the taxable year.

• Exempts individuals whose entire gross income comes from foreign sources and whose amount of creditable foreign taxes paid is under $300 from the foreign tax credit limitation.

• Establishes penalties for the unauthorized inspection of tax returns and tax return information.

• Repeals the requirement that wholesale liquor dealers post signs outside their stores indicating they sell liquor wholesale.

Full Bill Text

Full Bill Text