A bill to amend the Internal Revenue Code of 1954 to encourage State and local governments to decrease their reliance on real property taxes as the principal means of funding expenditures for education by allowing a credit against Federal income tax for State and local income taxes imposed to fund such expenditures.

[AI summary unavailable — showing source text] Allows a tax credit, under the Internal Revenue Code, of 50 percent of the qualified State and local educational income taxes imposed on an individual and paid by him during the taxable year. Sets forth limitations on the allowable amount of such credit. Defines "State and local educational income taxes" and other terms used in this Act. Sets forth specified rules regarding educational income taxes paid by parnerships and by electing small business corporations. States that the amount of qualified State and local educational income taxes paid by an individual shall be reduced by the amount of any refund of such taxes, whether or not received during the taxable year.…