17Nov_QuizIn discussions of the likelihood that federal tax reform will be enacted this year or in 2018, it’s often pointed out that it has been 31 years since the last reform effort became law. While the Tax Reform Act of 1986 is viewed by some as a starting point for this year’s effort, the times have changed considerably. What do you recall about the 1986 act?

1. Which member of Congress introduced the act in the House of Representatives?
A. Tip O’Neill
B. Jim Wright
C. Dan Rostenkowski
D. Tom Foley

2. Members of Congress are seeking to lower the maximum corporate tax rate from 35% to 20%. What maximum corporate tax-rate cut did the 1986 law establish?
A. From 46% to 34%
B. From 56% to 40%
C. From 30% to 18%
D. From 40% to 25%

3. What reduction of the top individual tax rate on ordinary income did the 1986 law enact?
A. From 65% to 30%
B. From 58% to 35%
C. From 50% to 28%
D. From 40% to 20%

4. The 1986 act sought to achieve revenue neutrality by shifting a large dollar amount of the tax burden from individuals to corporations. What was the dollar amount?
A. $72 billion
B. $12 billion
C. $35 billion
D. $24 billion

5. The act also sought to achieve revenue neutrality by offsetting tax cuts for individuals by eliminating loopholes in the U.S. tax code. What was the dollar amount of annual tax loopholes cut by the act?
A. $110 billion
B. $60 billion
C. $80 billion
D. $40 billion

6. From what percentage to what percentage did the 1986 act reduce the amount of income tax liability that could be offset by the business tax credit?
A. From 85% to 75%
B. From 100% to 80%
C. From $50% to 35%
D. From 80% to 70%

7. At what percentage did the act set the maximum tax rate on capital gains realized by a corporation?
A. 28%
B. 34%
C. 38%
D. 24%

Sources: Congress.gov, Encyclopedia.com, The New York Times

Answers: 1–C; 2–A; 3–C; 4–D; 5–B; 6–A; 7–B

, , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *