Reagan Tax Cut
August 15, 1981. President Reagan signed into law the Economic Recovery Tax Act, also known as the Kemp-Roth bill after its two principal sponsors, U.S. Representative Jack Kemp and Senator Bill Roth. The Reagan tax cut reduced marginal rates by about 23% over three years and instituted adjustments for inflation in the bracket limits. The latter eliminates "bracket creep" where individuals find themselves in higher tax brackets as incomes increase simply due to inflation even if real incomes do not change.
Also visible in this graph is an explanation for the Federal budget surpluses from 1998 to 2001.