The top tax rate went from 70 percent to 50 percent.
The bottom rate went from 14 to 11,
and capital gains went from 28 to 20.
In the 1986 tax reform Bill the top rate fell again from 50 to 28
The bottom rate however increased to 15,
and capital gains was back up to 28 percent unless you own for more than six months.
But it wasn’t all bad, In the 1986 Bill a lot of loopholes were closed like crazy business expense stuff. In 1981 they tied the standard deduction to inflation and they made socialism easier. It made it easier for Employee Stock ownership plans or ESOPS’s. There was general economic prosperity, but it seems like we’re already headed down that road.
The struggle of lower income Americans, however, is where things change the most.
Now the average family income went from about 33 000 in 1983 to 35 000 in 1989. Now this is all adjusted for inflation, but for lower income Americans they lost about two thousand dollars over that same period. For instance, families that had no college graduates went from making about 28 000 to about twenty seven thousand a year. So that median number is heavily inflated by the rich who did very very well in the 80s, and the wealth gap hasn’t stopped increasing since.Follow Tony