Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) was a major piece of legislation that was signed into law by President Ronald Reagan on September 3, 1982. The act was designed to reduce the federal deficit and promote economic growth.

TEFRA included a number of provisions that affected the taxation of individuals and businesses. For individuals, the act raised the top marginal tax rate from 50% to 55% and created a new 15% tax bracket for incomes between $50,000 and $100,000. The act also increased the amount of the standard deduction and the personal exemption.

For businesses, TEFRA made a number of changes to the corporate income tax. The act reduced the top corporate tax rate from 46% to 40% and created a new 34% tax bracket for corporations with taxable income of more than $10 million. The act also increased the amount of the research and development tax credit and made a number of changes to the depreciation rules.

In addition to the tax provisions, TEFRA also included a number of other provisions that affected the federal budget. The act created a new trust fund to pay for Medicare Part B premiums and increased the amount of the Social Security payroll tax. The act also made a number of changes to the federal budget process.

TEFRA was a complex piece of legislation that had a significant impact on the federal budget and the tax system. The act was generally seen as a success, as it helped to reduce the federal deficit and promote economic growth.