Twenty-five years ago today, October 22, 1986, President Reagan signed a tax reform bill into law. This reform bill is still in place as the basis for our current income tax system. From Forbes:
It curbed special deductions, exclusions and breaks (tax expenditures, in tax speak) and chopped the top individual income tax rate from 50% to 28% and the top corporate rate from 46% to 34%. Twenty-five years later, the country is in a deep fiscal hole, the tax code has suffered through years of tax “deform” and a ticking time bomb left in the 1986 Act (the alternative minimum tax) has yet to be defused. So there’s wide agreement that another overhaul is in order. But there’s no consensus on what a rebuilt tax system should look like, how much revenue it should raise, or whether the tax burden should be left as it is, shifted up to millionaires and billionaires or pushed down to middle and working class folks, as in Republican Presidential candidate Herman Cain’s 9-9-9 plan.
Forbes has a special report on the 25th anniversary, which can be found here.