Economic Recovery Tax Act

(redirected from Kemp-Roth Tax Cuts)

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.
References in periodicals archive ?
Ronald Reagan won the election in 1980 after adopting the Kemp-Roth tax cuts and pounding them at campaign stops.
To his credit, Roth has been a longtime advocate of tax simplification, going back to the original Kemp-Roth tax cuts he helped develop 20 years ago.