---
title: Tax Reform Act of 1986
description: The Tax Reform Act of 1986 was meant to simplify the tax code and stimulate the economy.
---

[Realized 1031 Glossary of Terms ](https://www.realized1031.com/glossary)

# [Tax Reform Act of 1986](https://www.realized1031.com/glossary/tax-reform-act-of-1986)

 Written by [The Realized Team](https://www.realized1031.com/glossary/author/the-realized-team) | Jun 27, 2022 12:00:00 PM

The Tax Reform Act of 1986 was signed into legislation by President Ronald Regan. It was meant to simplify the tax code and stimulate the economy. The law lowered the maximum rate on ordinary income (earned income) from 50% to 28% while raising it on long-term capital gains (unearned income) from 11% to 15%.

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