Fayette County's representative in the U.S. House said this week that tax relief “for working Americans” is high on his list of goals.

Rep. Mac Collins, R-Hampton, who serves on the Ways and Means Committee, said the body this week is debating the 1999 Tax Relief Act, include breaks for education, health care and capital gains.

“These three areas,” Collins said, “are the heart of tax relief that will truly make a difference in the lives of working Americans. Education tax relief will assist American families in paying for higher education, long-term health care tax relief will help older Americans and their families with their growing needs, and reduction of the capital gains tax rate will keep our economy strong and help create more jobs.”

According to Collins, education tax relief will:

ä Increase the contribution limit for education savings accounts and expand them to include K-12 expenses: The plan would allow tax-free expenditures from ESA's (currently called education individual retirement accounts) for public and private elementary and secondary school expenses, as well as higher education costs. The plan would also raise the maximum annual amount of contributions to ESA's from $500 to $2,000.

ä Promote public school construction. The plan would make permanent changes to bond rules so that state and local governments issuing public school construction bonds can more easily comply with arbitrage rebate rules. Generally, the plan would provide issuers with four years to spend bond proceeds (rather than the current two-year rule that applies to construction of public schools). Since the issuer would have less rebate to pay to the federal government, school districts would have more funds for new schools, equipment and teachers.

He said long-term health care relief will:

ä Provide a 100 percent deduction for long-term care premiums. The plan will provide individuals who purchase long-term care insurance with a phased-in 100 percent tax deduction on their insurance premiums.

ä Provide an additional exemption for taxpayers caring for elderly family members at home. The plan will provide taxpayers caring for elderly family members at home with an additional personal exemption (currently $2,750) when filing income tax returns.

ä Permit employee benefit plans to include long-term care insurance. The plan will permit employers for the first time to include long-term care insurance as part of “cafeteria” benefits plan, where employees could dedicate pre-tax wages toward the purchase of long-term care insurance.

Capital gains tax relief, Collins said, will:

ä Provide relief for 84 million Americans investing in the stock market and encourage further investment.

ä Reduce the maximum capital gains tax rate from 20 percent to 15 percent on net capital gains from property held more than one year.

ä Reduce the capital gains rate for taxpayers in the 15 percent ordinary income tax bracket from 10 percent to 7.5 percent.

Both rate reductions would be retroactive to July 1, 1999.

Among other provisions, the bill also would phase down rates and repeal the federal estate, gift and generation-skipping transfer tax. The estate tax is commonly referred to as the “death tax,” since the tax is generally triggered by death.

“No American,” Collins said, “should be forced to give 55 percent of their savings, their business, or their farm in taxes when they die. The death tax has outlived any worthwhile purpose, and the time has come for us to bury it once and for all.”

Today, one-third of small-business owners will have to sell outright or liquidate a part of their firms to pay estate taxes. Half of those who must liquidate to pay the IRS will each have to eliminate 30 or more jobs.

Additionally, more than 70 percent of family businesses do not survive the second generation and 87 percent do not make it to the third generation. “The death tax destroys family businesses and stifles investment that would lead to increases in jobs and personal income,” Collins said.