Economic Recovery Tax Act of 1981 (ERTA): Overview

The Economic Recovery Tax Act of 1981 (ERTA) was a historic tax cut signed by President Ronald Reagan. It slashed the highest income tax rate from 70% to 50% and included incentives for small business, retirement savings, and inflation indexing of tax brackets. Inspired by supply-side economics, the bill faced controversy and was later partially reversed due to its impacts on the economy and the federal deficit.
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