In 1981, Congress passed the controversial Economic Recovery Tax Act (ERTA). ERTA reduced personal income tax rates and provided a new accelerated depreciation system for business. Supporters of the legislation predicted that the increased after-tax returns produced by these tax reductions would encourage saving and investment. This article examines the political history and economic theory behind the tax cuts and the impact these changes may have had on saving and investment.
© 1989 by the Board of Student Publications, University of Northern Iowa
"The Effect of the Economic Recovery Tax Act of 1981 on Saving and Investment,"
Draftings In: Vol. 4:
2, Article 5.
Available at: https://scholarworks.uni.edu/draftings/vol4/iss2/5