Question

Which of the following is true about the Tax Reform Act of 1986?

a. It lowered the top individual income tax rate from 50 percent to 28 percent.
b. It decreased the capital gains rate.
c. It lowered the bottom individual income tax rate from 15 percent to 11 percent.
d. All of the above.

Answer 1

The true statement about the Tax Reform Act of 1986 is that it lowered the top individual income tax rate from 50 percent to 28 percent while increasing the bottom rate from 11 percent to 15 percent.

Step-by-step explanation:

The correct answer to the question of what is true about the Tax Reform Act of 1986 is: It lowered the top individual income tax rate from 50 percent to 28 percent. The Tax Reform Act of 1986 was a significant piece of legislation passed during Ronald Reagan's presidency which simplified the tax code, reduced the top individual tax rates from 50 percent to 28 percent, and raised the lowest tax rate from 11 percent to 15 percent. This act also tackled tax shelters and other methods previously used to hide income or illegally reduce one's tax burden. Despite simplification, the act maintained a progressive tax structure, where the top earners continued to pay a higher rate on their income.