U.S. And Swedish Trends In Tax Reform

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act passed with a great deal of bipartisan support. This support was made
possible by two features of the act. The first was that federal income tax
rates were to be cut dramatically. While this would lead one to believe that
federal government receipts were cut substantially as well, it was the second
important feature of the bill that allowed it to be revenue neutral. This
feature was that the bill was to improve horizontal equity in the tax system.
This would be accomplished by eliminating many of the deductions that many
individuals, particularly the well to do, were allowed to make.
Many of the complains about the tax system in the United States that
preceded the Tax Reform Act were about the gross horizontal inequities that it
allowed. A great deal of press preceding TRA-86 showed the public how many of
the country's wealthiest individuals were able to get away with paying little or
no federal income tax. Eliminating many of these tax deductions and loopholes
had ...

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