THE PROPOSED 1992 BUDGET
First-time home buyers could use IRAs for down payments.
New in this budget:
The top capital gains tax would be 19.6% on profits from assets held for three years or more.
A Family Savings Account would allow contributions of up to $2,500 a year for an individual and $5,000 for a couple, and the funds could be withdrawn tax-free after seven years.
First-time home buyers could withdraw up to $10,000 without penalty from an Individual Retirement Account to use as a down payment on certain homes.
For those over 65 on Medicare with incomes of $125,000 and more, monthly insurance premiums for Part B coverage would jump to $95.40 next year from $29.90 this year.
People would not receive farm subsidy payments if their non-farm income is $125,000 or more.
Programs to be continued:
The 10% tax credit for buying solar or geothermal equipment would be extended for a year.
The business research and experimentation tax credit would become permanent.
The tax credit for hiring members of “targeted” groups would be extended for a year.
The 25% deduction for health insurance for the self-employed would be extended for a year.
Excise taxes on liquor: Extensions would be approved for the tax on a 750-milliliter bottle of gin, which climbed to $2.14 from 1.98 on Jan. 1; the tax on a six-pack of beer, which rose to 33 cents from 16 cents, and the tax on a 750-milliliter of red table wine, which rose to 21 cents from 3 cents.
The tax on cigarettes, which rose to 20 cents a pack on Jan. 1 from 16 cents and is scheduled to rise another 4 cents on Jan. 1, 1993, would be extended.
The gasoline tax, which rose to 14 cents a gallon on Dec. 1 from 9 cents, and the diesel fuel tax, which rose 5 cents to 20 cents a gallon, would be extended.
The tax on airline tickets, which rose to 10% from 8%, would be extended.
For personal use, the 10% luxury tax that was imposed Jan. 1 on the price of cars above $30,000, aircraft above $250,000, boats and yachts above $100,000 and furs and jewelry above $10,000 would continue. Boats, planes and cars used exclusively in business are not subject to the tax.
The Medicare payroll tax on all salary up to $125,000, which started Jan. 1, would be extended.
Industry impact
Defense-related research and development would rise by $5 billion, a gain of 14%. This includes such programs as technologies to detect increasingly quiet submarines, the improvement of torpedo warheads and money for a new generation of advanced weapons.
The space science budget would rise $2.1 billion, or 15%, for such projects as nine space shuttle flights and development of a new rocket motor.
Eight different government agencies are working cooperatively on a development of the next generation of high-speed computers. They aim toward “teraflop” supercomputers, doing a trillion operations per second. Spending would rise by $149 million, or 30%.
Research on global environmental problems would rise $232 million, or 24%, to pay for collection of information by ships, aircraft and ground facilities. Inexpensive satellites would be used to gather data about ocean surfaces, tropical rainfall and the ozone layer. Spending for Arctic research would be increased.
