Happy Anniversary Tax Reform Act of 1986 October 21, 2011 Scott Hodge Scott Hodge Tomorrow (October 22nd) marks the 25th anniversary of the enactment of the Tax Reform Act of 1986 which dramatically simplified the tax code while lowering tax rates for individuals and corporations. Tax reform is once again the hot topic in Washington so I thought it would be interesting to see how some of the major tax, budget, and economic indicators today compare to the conditions in 1986. Topic 1986 2011 President Ronald Reagan (R ) Barack Obama (D) Chairman of the Ways and Means Committee Dan Rostenkowski (D-IL) David Camp (R-MI) Chairman of the Finance Committee Robert Packwood (R-OR) Max Baucus (D-MT) Top corporate tax rate 46% 35% Top individual tax rate 50% 35% Income threshold for paying top rate (in 2011 dollars) $358,782 $379,150 Share of income earned by the top 1% of filers 11.3% 16.9% Share of taxes paid by the top 1% of filers 25.8% 36.7% Average tax rate of the top 1% of filers 33.1% 24.0% Share of income earned by the bottom 50% of filers 16.7% 13.5% Share of taxes paid by the bottom 50% of filers 6.5% 2.3% Average tax rate of the bottom 50% of filers 5.6% 1.8% Number of tax brackets 15 6 Number of income tax filers 103,045,170 140,494,127 Number of filers with no income tax liability 19,077,757 58,603,938 Percent of filers with no income tax liability 18.5% 41.7% Deficit as a percent of GDP 5.0% 8.7% Deficit in billions of 2011 dollars -$420 -$1,299 Federal Outlays as a percent of GDP 22.5% 24.1% Federal Outlays in billions of 2011 dollars $1,880 $3,601 Federal revenues as a percent of GDP 17.5% 15.4% Federal revenues in 2011 dollars $1,460 $2,302 Real GDP growth (2nd Quarter) 1.6% 1.3% Unemployment rate (September) 7.0% 9.1% Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Federal Tax Policy Individual Income and Payroll Taxes Tags Tax Reform Act of 1986
