Tax Reform Act Of 1993

Definition of 'Tax Reform Act Of 1993'


Legislation aimed at reducing the federal deficit through a combination of increased taxes and reduced spending. This act was created by the Clinton Administration in 1993 and contained several major provisions for individuals, such as the addition of the 36% tax bracket, an increase in gasoline taxes and an additional tax of 10% on married couples with income above $250,000. It also raised taxation on Social Security benefits and eliminated the tax cap on Medicare.

Investopedia explains 'Tax Reform Act Of 1993'


This legislation is also known as the Revenue Reconciliation Act of 1993. Individuals were not the only ones affected by this legislation; the corporate tax rate was raised as well, along with a lengthening of the goodwill depreciation period and the elimination of deductibility for congessional lobbying expenses. Many other taxes were raised and deductions reduced or eliminated as well.



comments powered by Disqus
Hot Definitions
  1. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by additional investment would not warrant the expense. A harvest strategy is employed when a line of business is considered to be a cash cow, meaning that the brand is mature and is unlikely to grow if more investment is added.
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  5. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer to government spending rather than business or individual spending. When referring to accrued federal government deficits, the term "national debt” is used.
  6. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the forex market.
Trading Center