Question of the Day

When Congress and President Reagan enacted tax reforms in 1986 that cut the top income tax bracket from 50% to 28% and the top corporate tax bracket from 46% to 34%, did the average effective tax rate on the top 20% of income earners increase or decrease?



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Their effective tax rate increased, because the reforms also eliminated numerous tax preferences that were used for social engineering and special interest subsidies. Since that time, other Congresses and Presidents have enacted more than 150 tax preferences. Trump's recent tax reform proposal is similar in principle to this 1986 reform.

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