A:

When Ronald Reagan took office in 1981, he brought in an agenda to try and clear the remnants of stagflation that plagued the nation in the 1970s. His strategy, referred to as Reaganomics, was to reduce taxes and government spending in order to free up more private capital for investment in the economy. Regan followed through on his campaign promises and lowered federal taxes with the Economic Recovery Tax Act of 1981. There were broad tax cuts, but the most significant tax impact was felt in the top personal tax bracket where tax rates dropped by over half.

This sudden relief from taxes pushed many of the marginally wealthy into a net worth of millions. The extended economic boom that followed catapulted even more Americans into millionaire status. On March 8, 1985, the IRS announced that there were over 400,000 American millionaires, double the number before Regan took office.

Unfortunately, Reagan was unable to keep to his reduction in government spending or make any significant reduction in the size of government. During the same period as the millionaire boom was taking place, the nation's debt was ballooning and the gap between the rich and poor grew substantially. When Reagan left office, the new president, George H. Bush, raised taxes again to make up government shortfalls. The next millionaire boom came with the internet bubble and many of the new millionaires were paper millionaires only for a brief time before the market crashed.

Check out our related article, 10 Steps To Retire A Millionaire.

This question was answered by Andrew Beattie.

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