Taxpayer Relief Act of 1997

Taxpayer Relief Act of 1997

From Wikipedia, the free encyclopedia

The Taxpayer Relief Act of 1997 (Public Law 105-34) reduced several federal taxes in the United States.

Subject to certain phase-in rules, the top capital gains rate fell from 28% to 20%. The 15% bracket was lowered to 10%.

Starting in 1998, a $400 tax credit for each child under age 17 was introduced, which was increased to $500 in 1999. This credit was phased out for high income families.

The act exempted from taxation profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles.

The $600,000 estate tax exemption was to increase gradually to $1 million by the year 2006.

Family farms and small businesses could qualify for an exemption of $1.3 million, effective 1998. Starting in 1999, the $10,000 annual gift tax exclusion was to be corrected for inflation.

The act also provided tax relief for education savings and retirement accounts. Some expiring business tax provisions were extended.

It was signed into law by President Bill Clinton on August 5, 1997.

Legislative history

This was the first law devoted solely to tax cuts that Congress enacted using the fast-track budget reconciliation process.

Final House vote, July 30, 1997:

Vote by Party

Yea

Nay

Republicans

225

99.6%

1

0.4%

Democrats

164

80.0%

41

20.0%

Independents

0

0.0%

1

100%

Total

389

90.0%

43

10.0%

Not voting

2

1

Final Senate vote, July 30, 1997:

Vote by Party

Yea

Nay

Republicans

55

100%

0

0.0%

Democrats

37

82.2%

8

17.8%

Total

92

92.0%

8

8.0%

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