The Revenue Act of 1926 also addressed objections to the Revenue Act of 1924 by eliminating the gift tax and and ended public access to federal income tax returns. The bill also reduced inheritance and personal income taxes, cancelled many excise taxes.
Facts about Revenue Act of 1926
The 1926 law reduced the maximum individual income tax rate from 40% to 25%.
The bill addressed objections to the 1924 act by eliminating the gift tax and reduced the estate tax (inheritance tax) from 40% to 20%.
The estate tax (inheritance tax) was significantly reduced from 40% to 20%.
The act reversed the 1924 provision that allowed newspapers to publish details of people and their tax payments.
The bill reduced personal income taxes - by 1928 the majority of tax payers were paying ½% federal income tax and wealthy Americans were paying 25%.
The Roaring Twenties were a golden age for tax cuts that were introduced as part of the Mellon Plan. The new, reduced federal income tax rates put additional money into the hands of the consumers.
However, the federal income tax cuts contributed to the wild spending trends of consumers, which in turn led to the over-production of goods, which subsequently led to the 1929 Wall Street Crash.
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