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The phrase Reagan tax cuts refers to changes to the United States federal tax ... In the resulting Revenue Act of 1932 the top marginal tax rate was raised from 25% ...
The Economic Recovery Tax Act of 1981 (ERTA) removed the pension plan clause and raised the contribution limit to the lesser of $2000 or 100% of earned income. The 1986 Tax Reform Act retained the $2000 contribution limit, but restricted the deductibility for households that have pension plan coverage and have moderate to high incomes.
Reagan asserted that he had no plans to raise taxes in his second term, and Bush quickly argued that he had been misunderstood. Bush's statements led some conservatives to begin doubting Bush's dedication to tax cuts. [3]: 23 As the competition to succeed Reagan began in 1986, it was clear that taxes would be a central issue.
The Omnibus Budget Reconciliation Act of 1990 raised the top tax rate from Ronald Reagan’s 28% up to 31%. While it wasn’t the biggest tax increase in history, it was one of the most consequential.
Reagan undid 40% of his 1981 tax cut, in 1983 he hiked gas and payroll taxes, and in 1984 he raised tax revenue by closing loopholes for businesses. [42] According to historian and domestic policy adviser Bruce Bartlett, Reagan's 12 tax increases over the course of his presidency took back half of the 1981 tax cut. [43]
The so-called “self-employment tax” is still in effect today. Reagan’s signature raised the retirement age from 65 to 67 — albeit gradually over decades through 2027.
Another Reagan legacy was the expansion of the alternative minimum tax. [50] When Ronald Reagan signed the Tax Reform Act of 1986, the AMT was expanded to target middle class deductions related to having children, owning a home, or living in high tax states. In 2006, the IRS's National Taxpayer Advocate's report highlighted the AMT as the ...
For example, the highest income tax rate when Reagan took office was 70%. He would eventually lower it to 33%. Read more:Project 2025 plan calls for demolition of NOAA and National Weather Service.