Tax Reform Act of 1986

Tax Reform Act of 1986
Long title	An Act to reform the internal revenue laws of the United States.
Acronyms (colloquial)	TRA
Nicknames	Tax Reform Act of 1985
Enacted by	the 99th United States Congress
Effective	October 22, 1986
Citations
Public law	99-514
Statutes at Large	100 Stat. 2085
Codification
Titles amended	26 U.S.C.: Internal Revenue Code
U.S.C. sections amended	26 U.S.C. § 1 et seq.
Legislative history
	Introduced in the House as H.R. 3838 by Dan Rostenkowski (D–IL) on December 3, 1985; Committee consideration by House Ways and Means, Senate Finance; Passed the House on December 17, 1985 (passed voice vote); Passed the Senate on June 24, 1986 (97-3); Reported by the joint conference committee on September 18, 1986; agreed to by the House on September 25, 1986 (292-136) and by the Senate on September 27, 1986 (74-23); Signed into law by President Ronald Reagan on October 22, 1986;

The Tax Reform Act of 1986 (TRA) was passed by the 99th United States Congress and signed into law by President Ronald Reagan on October 22, 1986.

The Tax Reform Act of 1986 was the top domestic priority of President Reagan's second term. The act lowered federal income tax rates, decreasing the number of tax brackets and reducing the top tax rate from 50 percent to 28 percent. The act also expanded the earned income tax credit, the standard deduction, and the personal exemption, removing approximately six million lower-income Americans from the tax base. Offsetting these cuts, the act increased the alternative minimum tax and eliminated many tax deductions, including deductions for rental housing, individual retirement accounts, and depreciation.

Although the tax reform was projected to be revenue-neutral, it was popularly referred to as the second round of Reagan tax cuts (following the Economic Recovery Tax Act of 1981). The bill passed with majority support in both the House of Representatives and the Senate, receiving the votes of majorities among both congressional Republicans and Democrats, including Democratic Speaker of the House Tip O'Neill.