Tax Reform Act of 1986
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
code, broaden the tax base and eliminate many tax shelters and other preferences. Referred to as the second of the two "Reagan tax cuts" (the Kemp-Roth Tax Cut
Kemp-Roth Tax Cut
The Economic Recovery Tax Act of 1981 , also known as the ERTA or "Kemp-Roth Tax Cut," was a federal law enacted in the United States in 1981...
of 1981 being the first), the bill was also officially sponsored by Democrats, Richard Gephardt of Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
in the House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
and Bill Bradley
William Warren "Bill" Bradley is an American hall of fame basketball player, Rhodes scholar, and former three-term Democratic U.S. Senator from New Jersey. He ran unsuccessfully for the Democratic Party's nomination for President in the 2000 election.Bradley was born and raised in a suburb of St....
of New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...
in the Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
The Tax Reform Act of 1986 was designed to be tax revenue neutral, because individual taxes were decreased while corporate taxes were increased.