Tax Reform Act of 1993
What it is:
Also called the Revenue Reconciliation Act of 1993, the Tax Reform Act of 1993 was a major revision to the United States tax system.
How it works (Example):
The Tax Reform Act of 1993 had several components that received a lot of attention. The Tax Reform Act of 1993:
• Raised taxes on married couples making over $250,000
• Raised taxes on Social Security benefits
• Raised taxes on Medicare benefits
• Created higher tax brackets (36% and 39.6%)
• Raised the corporate tax rate
• Lengthened the time over which companies could amortize goodwill
• Eliminated the tax deduction for congressional lobbying expenses
Why it Matters:
The primary objective of the Tax Reform Act of 1993 was to reduce the federal budget deficit.