Family, Investment, Retirement, Savings, and Tax Fairness Act of 1995

TABLE OF CONTENTS:

Title I: Family Tax Credit

Title II: Reducing the Cost of Capital by Reducing Capital

Gains Tax Rates and Indexing the Basis of Certain Assets

Title III: Neutral Cost Recovery

Title IV: Increasing National Savings Through Individual

Retirement Plus Accounts, Indexing for Inflation the

Income Thresholds for Taxing Social Security Benefits,

Etc.

Title V: Cap on Federal Spending and Establishment of

Commission to Reduce Federal Spending

Title VI: Elimination of Social Security Earnings Test

Family, Investment, Retirement, Savings, and Tax Fairness Act of 1995 - Title I: Family Tax Credit - Amends the Internal Revenue Code to allow individuals a tax credit of $500 multiplied by the number of qualifying children who have not attained age 18. Places limitations on such credit and adjusts it for inflation.

Title II: Reducing the Cost of Capital by Reducing Capital Gains Tax Rates and Indexing the Basis of Certain Assets - Reduces the individual and corporate capital gains rate from 34 percent to 15 percent. Reduces such tax to 7.5 percent for low- and middle-income taxpayers.

Provides for the phaseout of personal exemptions and the overall limitation on itemized deductions to take into account adjusted gross income which has been reduced by net capital gain.

(Sec. 204) Requires indexing, based on the gross national product deflator, of the adjusted basis of certain assets (corporate stock and tangible property that is a capital asset of property used in a trade or business) that have been held for more than one year at the time of sale or other transfer, solely for the purpose of determining gain or loss.

(Sec. 205) Provides for indexing the limitation on capital losses of noncorporate taxpayers.

Title III: Neutral Cost Recovery - Allows the depreciation deduction to be computed based on a neutral recovery basis for property placed in service after December 31, 1994.

(Sec. 302) Establishes special depreciation rules applicable under the adjusted current earnings provisions of the minimum tax for taxable years after 1994.

Title IV: Increasing National Savings Through Individual Retirement Plus Accounts, Indexing for Inflation the Income Thresholds for Taxing Social Security Benefits, Etc. - Allows individuals to establish individual retirement plus accounts with tax treatment similar to that for individual retirement plans. Makes contributions to such account nondeductible.

Provides for qualified distributions from such accounts, other than for general retirement purposes, including special purpose distributions made for the purchase of a first home and for medical or educational purposes. Prohibits special purpose distributions from being made during the first five years of the account.

(Sec. 402) Provides an inflation adjustment after 1997 for income thresholds in determining the taxation of social security benefits. Excludes income from individual retirement plans when determining modified adjusted gross income.

(Sec. 403) Provides an inflation adjustment after 1997 for the maximum amount allowable as a deduction for retirement savings.

Title V: Cap on Federal Spending and Establishment of Commission to Reduce Federal Spending - Establishes the Spending Reduction Commission to: (1) recommend specific reductions in Federal activities to assure that spending does not grow at a rate in excess of two percent per year beginning after FY 1995; and (2) take actions required by this title to achieve such reductions.

(Sec. 504) Sets forth procedures for the Office of Management and Budget for making budget outlay reduction recommendations to the appropriate congressional committees and the Commission. Provides for the President to review such recommendations.

(Sec. 505) Provides for congressional consideration of approved recommendations as submitted by the President through a joint resolution.

(Sec. 506) Declares all budget reductions made under this title to be permanent.

(Sec. 509) Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to set forth sequestration procedures when the increase in annual Federal spending exceeds the amount resulting from an annual rate of inflation of two percent.

Title VI: Elimination of Social Security Earnings Test - Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to remove the limitation on the amount of outside income which beneficiaries who have attained retirement age may earn without incurring a reduction in benefits.