How to survive the Clinton tax plan: debt reduction, wills, real estate ownership, and tax-deferred investments are among the strategies that can allow you to come out ahead.

• Author: Jenkins, Gary E.

EACH TIME Pres. Clinton describes his tax legislation, he makes the point that most of the money will be coming from the rich. The President maintains that, under his program, he simply is asking higher-paid Americans to pay their fair share of taxes.

Americans also have heard that the program would impose new taxes upon millionaires. Now that they have had more time to see some of the specifics of the Clinton changes, they have found that $1,000,000 is not what it used to be. Actually, "the millionaire's surtax" applies to those with one-fourth that income.

As with any tax law change, there will be both winners and losers. To make sure you're among the "winners" this time around, here are 10 helpful hints:

Under the Clinton tax legislation, gentlemen should prefer bonds. With the latest revisions in the top marginal tax rates, tax-exempt bonds should occupy a larger share of one's investment portfolio. In states with high income tax rates or rates tied to the Federal tax rates, a bond fund that is exempt at both the state and Federal levels should be considered at this time.

For the year 1993, a married taxpayer filing jointly will pay a marginal income tax rate of 31% on $89,150 of taxable income. Under the new legislation, that same rate still will apply, except that a new rate five percent higher (36%) would apply to married people filing jointly with taxable income of $140,000.

Another rate would be added in the form of "a millionaires surtax" on income in excess of $250,000. The surtax is equal to 10% of the top rate, or 3.6%, raising it to 39.6%. While this may seem high, it should be kept in its historical perspective. From 1940 to 1963, the top marginal rate never was below 81%. From 1970 to 1981, it was 70%, and from 1982 to 1986, the top rate on earned income was 50%. It was not until the Reagan era that rates really dropped under 50%, reaching the lowest point in 1988 at 28%.

While the new rates appear high, in their historical context, they still are very low. However, one should never forget the difference between marginal rates, those provided in the tax tables, and effective tax rates, which represent the actual percentage of one's income that is subject to tax.

While rates have been higher in the past, there also were many more loopholes and deductions available so that the effective rates probably were much lower or equal to those during the Reagan years. The increase in tax rates now without the offsetting loopholes, deductions, and tax shelters may mean that the effective tax rates are at their highest levels ever. Therefore...