Economic Recovery Act of 1981

The Economic Recovery Act of 1981 (ERTA) was a tax cutting initiative.

Expanded Definition

ERTA had several provisions. These provisions are itemized below:

• Across the board tax cut
• Indexed tax rates to the rate of inflation
• Cut top rate on the long-term capital gains tax to 20% from 28% and cut the rate on dividends, interest, and royalties to 50% from 70%.
• Lowered Marriage penalty tax
• Allowed all working people to open IRA's
• Created the All-Savers Certificate
• Allowance for reinvesting public utility dividends
• Reductions in estate taxes and gift taxes
• Lowered tax rate on the exercise of stock options
• Change rules on accelerated depreciation and investment credit