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Details of the budget plan

Published Oct. 18, 2005

Here are details of the budget deal emerging in Congress:MEDICARE

Extend 1.45 percent Medicare payroll tax to wages up to $125,000 from current $51,300 ceiling.

Adjust Part B premium to cover 25 percent of program costs, rising from $28.60 a month this year to a projected $46.50 in 1995.

Increase Part B deductible, currently $75, to $100 in 1991.

Curb Medicare payments to hospitals and doctors by about $30-billion over next five years.


Raise the official income-tax rate for taxpayers in the highest income brackets to 31 percent from 28 percent before. The increase would affect those with taxable incomes of about $80,000 for couples and about $50,000 for single people. Some taxpayers who currently pay marginal rates of 33 percent would receive a rate-cut to 31 percent.

Create another tax "bubble" by phasing out the personal exemption, currently $2,050 per person, for affluent taxpayers. This would be done by raising the top tax rate by 0.5 percent for each exemption on incomes between $150,000 and $275,000 for couples and families, and between $100,000 and $225,000 for singles.

Disallow $300 in deductions for every $10,000 in gross income above $150,000 for couples or $100,000 for singles, raising marginal tax rates for those affected by about 0.9 percent.


Cap the maximum capital gains tax rate at 28 percent, instead of current maximum of 33 percent.


Boost the federal gas tax, currently 9 cents a gallon, by 5 cents.


Increase the current 16-cent-a-pack cigarette tax by 4 cents in 1991 and another 4 cents in 1993.


Raise the liquor tax by $1.20 a proof gallon.

Boost the beer tax by 16 cents a six-pack.

Increase the table wine tax by 22 cents a bottle.


Impose a new 10 percent tax on the price above $30,000 for cars, $100,000 for boats, $5,000 for jewelry, $5,000 for furs and $250,000 for planes.


Increase earned-income tax credit for working poor by $5-billion over five years.


Impose a new "gas-guzzler" tax on cars whose gasoline mileage is less than 15 miles to the gallon.

Increase airline ticket tax to 10 percent from 8 percent.

Impose Social Security and Medicare payroll tax on state and local government workers beginning in 1991.


Offer new tax incentives for oil and gas exploration if oil prices fall below $34 a barrel.

Deny corporate deduction for interest paid on tax underpayments.

Increase tax for insurers.

Increase railroad retirement payroll tax.

Renew expiring tax credits through end of next year, include credit for research and development, health insurance for self-employed and low-income housing.


Cut Pentagon spending by as much as $185-billion over five years.


Cut farm subsidies by $13-billion over the next five years.


Allow some spending increases this year.

Hold growth in domestic spending programs to rate of inflation for next three years.

_ Los Angeles Times