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
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