The House's top tax-writer unveiled legislation Thursday that would lower levies for families with children, savers and many businesses, closely tracking most tax reductions promised by Republicans' "Contract With America."

"We are keeping our word," said House Ways and Means Committee Chairman Bill Archer, R-Texas, in a speech presenting the bill. "Taxes will be cut. Relief is on the way."As promised by the contract, the GOP's campaign pledge to America, the bill's centerpiece is a $500 tax credit for children less than age 18 in families earning less than $200,000. A tax credit is subtracted from the amount a taxpayer owes.

The credit would be nonrefundable. That means taxpayers who owe less than $500 could only use as much of the credit as it would take to make their tax liability zero and would not be entitled to a refund for the difference from the Internal Revenue Service.

Studies of the contract's tax proposals by the Joint Tax Committee, Congress' official tax analyst, have said the tax credit was supposed to be refundable. That would mean that people who owed no or very little taxes would be entitled to a refund from the IRS, which would mostly benefit lower-income people.

But Republicans said Thursday that the Joint Tax Committee report was wrong and that they always intended it to be nonrefundable.

As the contract promised, the Ways and Means measure would also reduce the capital gains tax rate paid by people who sell land and other property and create more generous Individual Retirement Accounts.

Archer said the measure will cost $189 billion over five years. Republicans say they plan to pay for it with savings from revamping welfare, renewing some restrictions on Medicare and cutting other programs.

Along with their pledge to eliminate federal deficits by 2002, the Republicans' promise to reduce taxes for millions of Americans was the main thrust of the contract, their guiding doctrine during last fall's election campaign.

But Democrats complained that the tax cuts would be a boon to the rich, paid for with cuts in welfare and other programs that largely serve lower-income Americans.

"They are about giving a tax cut, a huge tax cut, primarily for the privileged few," said House Minority Leader Richard Gephardt, D-Mo.

Democrats and some Republicans have already complained that the $200,000 income ceiling for the children's tax credit would allow tax breaks for well-to-do families. But Archer decided not to change that figure for fear of violating a key promise of the contract.

Polls show that some voters would prefer greater deficit reduction to lower taxes, but many lawmakers find tax-cutting legislation hard to oppose. President Clinton and Gephardt have each proposed their own, less expensive tax cuts, both aimed at lower-income people than Archer's legislation.

The tax-cut legislation is likely to be approved by the Ways and Means panel next week and by the full House afterward. Its toughest congressional hurdle is likely to be the Senate, where many Republicans, including Senate Finance Committee Chairman Bob Packwood, R-Ore., say deficit reduction should be the year's top focus, not lowering taxes.

The documents show that Archer's bill would also:

- Lower taxes for many companies that must pay the alternative minimum tax, which is aimed at businesses with so many deductions or credits that they could otherwise escape paying income taxes. This reduction, popular with business, was not part of the GOP contract.

- Allow more generous depreciation for companies with large amounts of costly equipment.

- Allow tax-free withdrawals from Individual Retirement Accounts for home buying, higher education and health-care costs. Contributions to the accounts would be taxed.