Appendix: Clinton's Feb. 6 Budget
The Budget Deal: A Conspiracy Of Celebration Yep, Congress and Clinton finally balanced the budget. But in their haste to hand out goodies, they missed a chance to defuse some time bombs. By Nancy Gibbs/TIME, 8/11/97
The Tax Bill: Money In Motion Why some of the "wealthy" have nothing to gain. By Daniel Kadlec/TIME, 8/11/97.
The Office Of Management and Budget
The Congressional Budget Office Gopher
Did Congress Approve Tax Measures Favoring The Well-Off? Iris J. Lav, associate director of the Center on Budget and Policy Priorities believes so, while J.D. Foster, executive director and chief economist for the Tax Foundation says the big winners are middle-class families.
Does The Budget Deal Address The Long-Term Entitlement Spending Crisis? -- John Tottie, Senior Economist with Citizens for a Sound Economy says the deal only worsens entitlement spending, while Brookings Institution Visiting Fellow Joseph White argues policymakers can't plan now for problems that are still 30 years off.
Is A Balanced Budget Amendment A Good Idea? Heritage Foundation senior fellow Daniel Mitchell takes on Robert Greenstein, executive director of the Center on Budget and Policy Priorities.
Balancing The Budget
The Tax Side
While not exactly commensurate with Ronald Reagan's $749 billion, three-year tax cut passed in 1981, GOP lawmakers say their five-year $94 billion tax relief package is a major achievement. Here's the breakdown:
| Capital Gains | |
|---|---|
|
old Top tax rate is 28%, 15% for those in lower income brackets. |
new Top rate would be 20% effective July 29, 1997, for investments held between one and five years. Investments held for more than five years would be taxed at a 18% rate beginning in 2001. The corresponding rates for those in lower income brackets would be 10% and 8%. |
| Child Tax Credits | |
|
old No tax credits. |
new $400 per child 16 and younger, rising to $500 in 1999. Begins to phase out for individuals earning $75,000 and couples earning $110,000. Couples with incomes as low as $18,000 can take advantage of the credit, even if they pay no taxes; they'll get a check from the government. |
| Tobacco Taxes | |
|
old 24 cents per pack. |
new 34 cents per pack in 2000, rising to 39 cents in 2002. |
| Estate Taxes | |
|
old First $600,000 of an estate is exempt from taxes. |
new The exempted amount rises, gradually over 10 years, to $1 million. The exempted amount rises to $1.3 million immediately for those with family farms or small businesses. |
| Real Estate | |
|
old Taxes are deferred on profits from a primary residence when they are reinvested in another home; homeowners can exempt $125,000 in profits one time once they turn 55 years old. |
new First $500,000 in profits is exempt, and the exemption may be used as often as every two years. |
| Education | |
|
old No education credits. |
new $1,500 a year for the first two years of college, $1,000 per year for each year after that. |
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