Economic Recovery Tax Act


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Economic Recovery Tax Act

United States legislation, passed in 1981 and signed by President Ronald Reagan that cut marginal tax rates significantly. For example, it cut the top tax rate from 70% to 50% over three years and the bottom rate from 14% to 11%. The Act was intended to stimulate economic growth by putting more money in people's pockets; this concept is a key component of what became known as Reaganomics. Government revenue declined by nearly 3% of GDP as a result of the Act. It is also called the Kemp-Roth tax cut after its two principal sponsors in Congress.
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Large personal and corporate tax reductions enacted in the Economic Recovery Tax Act of 1981, combined with back-to-back recessions in 1980 and 1981-1982, brought the revenue share down to well under 18 percent in 1983 and 1984.
When the interest rate was determined every two years (as it was before enactment of the Economic Recovery Tax Act of 1981), the spread between the section 6621 rate and the market rate may have become substantial and therefore arguably encouraged taxpayer "gaming.
In Chapter 5, "The Economic Recovery Tax Act of 1981," the point is made that the Act can be seen as a benchmark.
An incremental, 25 percent R&D tax credit was enacted as part of the Economic Recovery Tax Act of 1981.
The economy was in recession for most of the decade's first three years before responding to the stimulus provided by the Reagan Administration's Economic Recovery Tax Act of 1981 (ERTA).
In the early 1980s, when space was in unusually short supply, commercial real estate received an additional push from the Economic Recovery Tax Act, which provided an acceleration of depreciation allowances for capital goods.
In 1983, however, the situation reversed as a result of sharply lower inflation rates and the accelerated de preciation provisions of the Economic Recovery Tax Act of 1981.
Originally introduced in the Economic Recovery Tax Act of 1981, (1) the Sec.
With the passage of the Economic Recovery Tax Act in 1981, the tax-deductible contribution limit was increased to $2,000 and all taxpayers under age 701/2 with earned income were made eligible, regardless of any coverage under a workplace plan.
Ronald Reagan signed the Economic Recovery Tax Act of 1981.
Second, because 1983 tax rate schedules for estimated taxes did not fully reflect the reduction in liabilities under the Economic Recovery Tax Act of 1981 (ERTA), quarterly estimated payments in 1983 were unusually large and the corresponding settlements in 1984 were unusually small.
The Economic Recovery Tax Act of 1981 eliminated this, requiring all taxpayers to depreciate new or used real estate over 15 years.

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