Minimum Tax And Income Tax Rate

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A 30 percent excise tax on the amount of price over $30,000 for autos, $100,000 for boats, $250,000 for airplanes, and $10,000 for furs. Increased motor fuels taxes by 5 cents per gallon. Increased taxes on tobacco and alcoholic beverages: by 8 cents per pack of cigarettes, by $1.00 per proof gallon of liquor; by 16 cents per six-pack of beer; and by 18 cents per bottle of table wine. Extended Airport and Airway trust fund taxes and increased them by 25 percent. Permanently extended 3 percent excise tax on telephone service. Individual income tax rate increases: Increased top statutory tax rate from 28 percent to 31 percent, and increased the individual alternative minimum tax rate from 21 percent to 24 percent. Capped the capital gains rate at 28 percent. Limited value of high income itemized deductions: reduced by 3 percent times the extent to which AGI exceeds $100,000. Modified the bubble: temporarily created the personal exemption phase out applicable to the range of taxable income between $150,000 and $275,000. Payroll tax rate increases: Raised the cap on taxable wages for Hospital Insurance (Medicare) from $53,400 to $125,000. Extended social security taxes to state and local employees without other pension coverage. Imposed a supplemental 0.2 percent unemployment insurance surtax. Also according to Tax Legislation (2015), this budget agreement included tax credits and exemptions: Adjusted Earned income tax credit benefit levels and created a low-income credit for the premium costs of health insurance that includes coverage for children. Tax credits for research and exploration, low-income housing, business energy, targeted jobs, and orphan drugs. Tax exemptions for mortgage revenues and issue bonds Exclu... ... middle of paper ... ...h the slowing economic growth rate, the Fed cut interest rates in May 1995” (Kaplan, 2002). “The 10-year economic expansion of the 1990s came to a close in March 2001 and was followed by a short, shallow recession ending in November 2001. In response to the bursting of the 1990s stock market bubble in the early years of the decade, the Fed lowered interest rates rapidly” (History of the Federal Reserve, n.d.). From 1991 to 2001, the economy continued to grow. The monetary policies placed by the Fed during this time achieved its goals, especially high employment. By lowering interest rates, businesses can afford to borrow money. This allows businesses the opportunity to expand, creating more jobs. Individuals are also affected by lower interest rates. Lower rates decrease the cost of borrowing, allowing people to be able to spend more money, resulting in GDP growth.
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