To amend the Federal Election Campaign Act of 1971 and the Internal Revenue Code of 1986 to make Federal elections more competitive, open, and honest.

(Sec. 1) Amends the Federal Election Campaign Act of 1971 to eliminate the Secretary of the Senate and the Clerk of the House of Representatives as ex officio members of the Federal Election Commission (FEC).

Mandates that all reports, statements, and designations required to be filed under the Act be filed with the FEC.

(Sec. 2) Prohibits a labor organization from using employee dues or agency fees for political purposes without the person's written consent.

(Sec. 3) Limits contributions from persons other than local individual residents in House of Representatives elections.

(Sec. 5) Increases reporting requirements for individuals making independent expenditures.

(Sec. 6) Prohibits State contributions and expenditures in Federal elections.

(Sec. 8) Treats draft and encouragement contributions as candidate contributions.

(Sec. 9) Sets forth clarity standards for sponsor identification of certain unauthorized political advertising.

(Sec. 10) Provides for the removal of certain contribution limitations in House elections when an opponent's personal expenditures exceed specified limits.

(Sec. 12) Sets forth limitations and reporting requirements for amounts paid for mixed political committees ("soft money").

(Sec. 13) Amends the Internal Revenue Code to allow an income tax credit ($250 for an individual, $500 for a joint return) for qualified political contributions to congressional candidates.

(Sec. 14) Amends the Federal Election Campaign Act of 1971 to exclude certain contributions to political parties from annual limitations on individual contributions.

(Sec. 15) Removes limits on Federal election political party contributions.

(Sec. 16) Authorizes additional party committee expenditures to offset independent expenditures in congressional elections.

(Sec. 18) Authorizes local committees of political parties to make unlimited contributions and expenditures in congressional elections.

(Sec. 19) Reduces the limitation on nonparty multicandidate political committee (PAC) contributions.

(Secs. 20 through 22) Prohibits: (1) separate segregated fund handling of contributions; (2) fund transfers among PACs; and (3) candidates from establishing leadership committees.