"This tax bill

works because it is based on the Republican

balanced budget resolution, which saves and

strengthens Social Security and Medicare,

rebuilds our sagging defense, helps education,

and finally, it provides tax relief for

hard-working American families," said

Collins.

The bill provides a

phased-in 10 percent across-the-board tax cut,

removes a "tax penalty" on married

couples, offers help with medical care, and

encourages savings and investment by providing a

tax exclusion for $200 (singles) and $400 (joint

filers) interest on savings, Collins said in a

news release following the vote.

Collins also scored

legislative victories by securing the addition of

two amendments that he said would cut red tape

and reduce taxes.

"The tax cuts

in the Financial Freedom Act do not `give back'

money to taxpayers; they simply take less out of

each worker's paycheck," Collins said.

"Americans pay 38 percent of their income in

taxes, as much as they spend on food, clothing,

shelter and medical care combined. The average

family pays twice as much tax now than it did in

1985 and a higher percentage of their income in

taxes than at any time since the build-up for

World War II. Why should this be so, when we are

at peace, have a balanced budget, and are running

annual surpluses?"

In his release,

Collins invoked Federal Reserve Chairman Alan

Greenspan, saying Greenspan "prefers tax

relief to more spending, and I agree."

The bill

establishes a gradual reduction of tax rates over

ten years," Collins said. "It cuts the

15 percent lowest rate to 13.5 percent, and the

top rate, of 39.6 percent is reduced to 35.7

percent.

"We broaden

Education Savings Accounts so we can reduce the

tax costs for parents saving money for their

children's educations," Collins said.

"Some 70 percent of these ESA savings would

go to families with children in public schools.

We encourage small businesses to invest by

reducing capital gains tax rates.

"By phasing

down and eventually repealing the estate

tax," he added, "we will preserve the

family farms and businesses that will otherwise

have to be sold to pay the death tax. The bill

makes health coverage more affordable by allowing

taxpayers not fully covered by an

employer-sponsored plan to deduct the costs of

health insurance," he added.

The legislation

also provides married couples with a larger joint

deduction to eliminate the "marriage

penalty," he said.

A Collins-authored

amendment simplified taxation of distilled

spirits wholesalers so that the taxes would no

longer provide an advantage for foreign-distilled

spirits, he said. He also succeeded in amending

the Financial Freedom Act to make it possible for

land owners who occasionally sell timber to sell

their timber in lots. Under present regulations,

land owners can be categorized as

"dealers" by the Internal Revenue

Service and must use a more wasteful "pay as

cut" method to qualify for certain capital

gains tax treatment.

This method often

results in waste of timber and land, as well as

tax avoidance, Collins sais. "This was a

win-win amendment - even the IRS wanted to

simplify this provision of the code,"

Collins said.

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