The changes contained in the 1986 and 1993 tax reforms

Question

Quizplus · Accepted Answer

The 1986 and 1993 tax reforms broadened the tax base by eliminating or reducing many tax loopholes and deductions, which allowed for higher tax rates overall. This helped to reduce the variation in the effective tax rates among different income levels. Therefore, B is the correct answer. A is incorrect as the variation in effective tax rates was reduced, not increased. C is incorrect as the reduction was not in nominal tax rates but rather in effective tax rates. D is incorrect as the top marginal tax bracket was reduced to 39.6 percent in the 1993 tax reform.

The Changes Contained in the 1986 and 1993 Tax Reforms