Revenue Act of 1978

The United States Revenue Act of 1978, Pub.L. 95–600, 92 Stat. 2763, enacted November 6, 1978, amended the Internal Revenue Code by reducing individual income taxes (widening tax brackets and reducing the number of tax rates), increasing the personal exemption from $750 to $1,000, reducing corporate tax rates (the top rate falling from 48 percent to 46 percent), increasing the standard deduction from $3,200 to $3,400 (joint returns), increasing the capital gains exclusion from 50 percent to 60 percent (effectively reducing the rate of taxation on realized capital gains to 28%), and repealing the non-business exemption for state and local gasoline taxes.

Legislative history

The Act was passed by the 95th Congress and was signed into law by President Jimmy Carter on November 6, 1978.

Provisions

Flexible spending accounts

The Act also established Flexible spending accounts, which allow employees to receive reimbursement for medical expenses from untaxed income dollars. The Act added section 401(k) to the Internal Revenue Code.^[1] This latter provision, intended to limit executive compensation, was later used to develop one of the primary tax-advantaged retirement savings vehicles in use in the United States.

Notes

↑ See section 135(a) of the Revenue Act of 1978, Pub. L. No. 95-600, 92 Stat. 2763, 2785 (Nov. 6, 1978), redesignating former subsection (k) as subsection (l) and adding new subsection (k), effective for plan years beginning after December 31, 1979.

External links

Full text of the Act

Tax Acts of the United States

Internal Revenue	1861 1862 1864 1913 1916 1917 1918 1921 1924 1926 1928 1932 1934 1935 1936 1940 1940 (2nd) 1941 1942 1943 1943 1944 1945 1948 1950 1950 1951 1954 1954 Code 1962 1964 1968 1969 1971 1975 1976 1977 1978 1981 1982 Gas Tax 1984 COBRA 1986 1986 Code 1990 1993 1996 1997 1998 2001 2002 2003 2004 2005 2006 2008 Crisis 2009 2010 2012

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