CBS News: Trump’s Tax Cut Promise to Pay for Themselves. So Will They?
media mentionThe most durable effect of the 1981 cuts was to lay the groundwork for a tax reform in 1986, which was intended not to raise revenue but to clean up the tax code. In the century-old history of the income tax, the 1986 effort gets high marks from left and right alike as the only substantial effort to streamline the tax code.
“That was the last remotely aggressive effort to pare back loopholes,” said Matthew Gardner, senior fellow at the Institute on Taxation and Economic Policy. “Since then we’ve had a gradual but continual increase in the number of loopholes.”
As part of the deal, capital gains, which for most of U.S. history have been taxed at relatively low rates, were treated as ordinary income; the number of tax brackets was reduced; many tax shelters were eliminated and tax rates overall were cut.