
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, October 14, 1995                   TAG: 9510160035
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A2   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

HIGHLIGHTS OF GOP SENATE TAX CUT PLAN

CHILD CREDIT: Starting Jan. 1, a $500-per-child credit would go to single parents earning up to $75,000 and couples earning up to $110,000. Eligibility for a partial credit would be extended above those limits by $20,000 for every child in the family.

CAPITAL GAINS: Effective immediately, individuals could exclude from taxation up to 50 percent of capital gains earned by selling securities, real estate and other assets. That would effectively lower the capital-gains rate from a range of 15 percent to 28 percent, currently, to between 7.5 percent and 19.8 percent. However, some wealthy individuals subject to the alternative minimum tax would pay an effective rate of 21 percent. The corporate rate would drop from 35 percent to 28 percent.

INDIVIDUAL RETIREMENT ACCOUNTS: A new type of IRA would be created, with no income ceiling on eligibility. Contributions of up to $2,000 per year would be permitted for individuals ($4,000 for married couples). The contributions would not be tax deductible, but earnings would build up tax-free, and withdrawals would be allowed for first-time home purchases, catastrophic medical expenses, college education and in the event of extended unemployment. The income ceiling on eligibility for traditional, deductible IRAs would increase by $5,000 per year until it reached a phase-out range of $85,000-95,000 for individuals and $100,000-120,000 for couples.

ESTATE TAXES: The exemption from estate taxes would increase over six years from $600,000 currently to $750,000. The exemption would increase to $1.5 million for family-owned farms and businesses. In addition, the estate tax would be reduced by 50 percent on the next $3.5 million of a family-owned business or farm.

STUDENT LOANS: A credit equal to up to 20 percent of interest paid on student loans would be created.

- Associated Press

by CNB