ECONOMY: PERSONAL TAXES
* President Bush's most famous quip, "Read my lips, no new taxes," has become a part of history. But the issue of taxes is still here and a major part of the campaign. Should the well-to-do pay more and the middle class less, or should everyone get a tax cut? Should the capital-gains tax be reduced? Bush, Clinton, and Perot couldn't disagree more. BUSH
Income taxes - This time his lips are locked in a no-new-taxes vise grip. Instead, in a Sept. 10 speech in Detroit, he stated, "I am committed to cutting taxes across the board." It is a qualified tax cut, however. If Congress adopts his proposed spending cuts of $300 billion, Bush says he will give all taxpayers a 1 percent tax reduction, making the maximum rate 30 percent.
Personal capital-gains tax -
Wants to reduce the capital-gains rate to a maximum of 15.4 percent. It currently stands at 28 percent. There is no estimate yet on cost. In addition, he has proposed a first-time home buyers' tax credit of $5,000. CLINTON
Income taxes - Has his guns trained on the wealthy, planning to boost the maximum rate to 35 or 36 percent on income above $200,000; the 31 percent rate would be preserved for income below that. In addition, he plans a surtax of not more than 10 percent on income above $1 million. The Clinton camp estimates these increases will raise $20 billion a year in new revenue.
At the same time, Clinton plans a general reduction in taxes that is aimed at the middle class, but enjoyed by all. Planned is a 10 percent drop in the tax rate on the first $35,000 in income. This would reduce the rate for everyone from 15 percent to 13.5 percent. There is an alternative for families with children of a tax credit of $300 per child. Clinton estimates this will cost $50 billion over four years.
Personal capital-gains tax -
Would target a 50 percent reduction in the capital-gains tax to individuals who invest in new businesses held for at least five years. Clinton has spoken favorably about indexing the rate to take inflation into account. But that is not part of his plan today. He has no plans for a home buyer's tax credit. PEROT
Income taxes - Wants to increase the marginal tax rate on individuals making more than $55,550 (joint filers making more than $89,250) from 31 percent to 33 percent and potentially to 35 percent. Would eliminate the mortgage-interest deduction for second homes and would cap all mortgage deductions to home loans of $250,000. Perot would have all retirees "who can afford it" pay taxes on 85 percent of their Social Security benefits, instead of the 50 percent currently applicable on the elderly who make $2 5,000 a year as individuals or $32,000 when filing jointly.
Personal capital-gains tax - Would provide a "stair stepped" capital-gains tax, which would decrease over five years.
Other taxes - Proposes capping employer-paid health insurance at $335 per month per family and $135 per month per individual. And the Texan would increase gasoline taxes by 50 cents a gallon over the next five years.
