Economic Recovery Tax Act

The Economic Recovery Tax Act, enacted in 1981, aimed to stimulate the U.S. economy following a recession in the early 1980s. It primarily focused on tax cuts for individuals and businesses, with the intention of increasing spending and investment. Key features included reducing personal income tax rates, increasing depreciation allowances for businesses, and exempting some unemployment benefits from taxation. The Act sought to encourage economic growth by allowing people and companies to keep more of their earnings, thereby promoting consumer spending and business investment, ultimately helping the economy recover from downturns.