The U.S. Congress passed the Tax Reform Act of 1986 (TRA) (Pub.L. 99-514, 100 Stat. 2085, enacted October 22, 1986) to simplify the income tax code, broaden the tax base and eliminate many tax shelters and other preferences. Referred to as the second of the two "Reagan tax cuts" (the Kemp-Roth Tax Cut of 1981 being the first), the bill was also officially sponsored by Democrats, Richard Gephardt of Missouri in the House of Representatives and Bill Bradley of New Jersey in the Senate.
The Tax Reform Act of 1986 was given impetus by a detailed tax-simplification proposal from President Reagan's Treasury Department, and was designed to be tax-revenue neutral because Reagan stated that he would veto any bill that was not. Revenue neutrality was targeted by decreasing individual tax rates, eliminating $30 billion annually in loopholes, and increasing corporate taxes. The bill reduced overall revenues by 8.9 billion dollars. As of 2012, the Tax Reform Act of 1986 was the most recent major simplification of the tax code, drastically reducing the number of deductions and the number of tax brackets.
Read more about Tax Reform Act Of 1986: Income Tax Rates, Tax Incentives, Fraudulent Dependents, Changes To The AMT, Passive Losses and Tax Shelters, Tax Treatment of Technical Service Firms Employing Certain Professionals, Name of The Internal Revenue Code, Income Inequality
Famous quotes containing the words tax, reform and/or act:
“Change of fashion is the tax levied by the industry of the poor on the vanity of the rich.”
—Sébastien-Roch Nicolas De Chamfort (1741–1794)
“No advance in wealth, no softening of manners, no reform or revolution has ever brought human equality a millimetre nearer.”
—George Orwell (1903–1950)
“No legislation can suppress nature; all life rushes to reproduction; our procreative faculties are matured early, while passion is strong, and judgment and self-restraint weak. We cannot alter this, but we can alter what is conventional. We can refuse to brand an act of nature as a crime, and to impute to vice what is due to ignorance.”
—Tennessee Claflin (1846–1923)