Purchase Solution

How did the economy react to the last major tax increase?

Not what you're looking for?

Ask Custom Question

When did we have the last major tax increase? How did the economy react to that over the next few years?

Purchase this Solution
Solution Summary

The expert determines how the economy react to the last major tax increase.

Solution Preview

Hi there,

As your question is a bit vague, I am assuming that you are referring to the US Federal personal income tax system. Here is some information for you regarding the last major tax increase:

Between 1986 and 1990 the Federal tax burden rose as a share of GDP from 17.5 to 18 percent. Despite this increase in the overall tax burden, persistent budget deficits due to even higher levels of government spending created near constant pressure to increase taxes. Thus, in 1990 the Congress enacted a significant tax increase featuring an increase in the top tax rate to 31 percent. Shortly after his election, President Clinton insisted on and the Congress enacted a second major tax increase in 1993 in which the top tax rate was raised to 36 percent and a 10 percent surcharge was added, leaving the effective top tax ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • IS-LM model

    What will happen in the long run? d. If the Federal Reserve is following a policy of price stability, how should they react to the tax increase? If the Fed action is implemented, will the tax cut succeed in boosting output?

  • The CAFE standard

    If Congress wanted to increase the average fuel economy of cars and light trucks, could it accomplish this by imposing a tax on gasoline?

  • Fiscal Policy: Government spending, taxes, budget processes

    Despite of negative effect of the recession in the economy, the revenue from this source is anticipated to increase in the year 2009 by $ 14 billion or 2% from the last year.

  • Consumer Behavior and Recession in the last Decade

    Predicting how consumers will react given an altered parameters in the economy is vital to the survival of the capitalists. We discuss here the behavior of consumers during and after recession.

  • Business cycles: phases, indicators, measures, economic evolution

    Discuss the policies that Keynes and Hayek advocated regarding how the federal government should manage the economy. What are the major differences between each school of thought. b.

  • Current US FInancial Standpoint

    How will it affect you personally? Unemployment continues to remain high. We have had major health care reform that is now beginning to kick in. Markets have improved recently, but the recovery is anemic.

  • Government Spending, Tax Cuts

    Also, there is another "hidden" benefit - increased security in the U.S. could encourage international markets to invest in our economy (a benefit). Now let's talk about the major long-term tax cut.

  • Stock Prices Brief Analysis

    How did the stock prices of other big banks react to the earnings announcements by these two banks? How would you explain this reaction?

  • Changes in the price of a key commodity

    But the effects are delayed, and it is a measure inferior to a tax because it prescribes one method of adjusting to higher gasoline prices rather than allowing consumers to choose how best to adjust.

View More Related Solutions