cre’: Idiosyncratic Insanity or the Misreading of
Cultural Cues?” InEthnographic Feminism: Essays in
Anthropology, edited by Sally Cole and Lynne Phil-
lips. Ottawa, Ont.: Carleton University Press,- Feminist analysis of the the Canadian me-
dia’s representation of the event and its after-
effects.
Susan J. Wurtzburg
See also Crime; Feminism; Post office shootings;
Reagan assassination attempt; San Ysidro McDon-
ald’s massacre; Sexual harassment; Stockton massa-
cre; Women’s rights.
Economic Recovery Tax Act of
1981
Identification U.S. federal legislation
Date Signed into law on August 13, 1981
The Economic Recover y Tax Act of 1981 was an era-
defining law promoted by the newly elected President Ron-
ald Reagan that significantly reduced federal tax levels.
Ronald Reagan was elected president in No-
vember, 1980, promising significant tax cuts, and
his campaign pledge was fulfilled less than eight
months after he assumed office with the passage of
the sweeping Economic Recovery Tax Act (ERTA,
also known as the Kemp-Roth tax cut). Among the
significant features of ERTA, personal income taxes
were cut by around 23 percent over two years, they
were indexed for inflation, and the top marginal tax
bracket was reduced from 70 percent to 50 percent.
In addition, a generous set of depreciation sched-
ules (called the Accelerated Cost Recovery System)
was initiated for businesses.
The tax cuts enacted by ERTA were the largest in
history at the time and were guided by an unusually
coherent political and economic ideology. The pri-
mary theoretical support for significant tax cuts was
provided by the theory of supply-side economics,
which was supported by President Reagan. Reagan
argued that cutting personal income taxes would
stimulate the economy, resulting in new jobs and
other opportunities for Americans to create wealth.
As a consequence, he believed, net governmental
revenues would increase, because there would be
more income to tax, despite the decrease in the rate
of taxation. Economists overwhelmingly rejected
this argument, and they were concerned that ERTA
would significantly increase the national debt.
Supply-side supporters, however, argued that bud-
get deficits would not be a serious problem. Every
House Republican stood behind ERTA, and a siz-
able group of conservative Democrats—dubbed Boll
Weevils—voted with the Republicans in support of
the tax cuts.
Impact Through the successful passage of ERTA,
Reagan’s philosophy regarding the size and scope of
government set the tone for U.S. budget politics into
the twenty-first century. Supporters credited the tax
cuts with spurring economic expansion throughout
the 1980’s and with reducing the scope of the fed-
eral government. Critics, however, argued that the
tax cuts came at the expense of large budget deficits
and a constantly increasing national debt. It has
been estimated that ERTA cost the federal govern-
ment more than $2 trillion in lost revenue over the
period 1982-1991, which—because spending did not
decrease alongside revenue—led to the largest defi-
cits in the country’s history. Between 1982 and 1989,
the national debt almost tripled, going from $1.1
trillion to $2.9 trillion. Budget politics in the United
States after 1981 focused largely on the annual defi-
cits contributing to this debt. Those politics also be-
came more contentious, with budgetary votes be-
coming increasingly partisan and divisive after 1981.The Eighties in America Economic Recovery Tax Act of 1981 309
President Ronald Reagan signs the Economic Recovery Tax Act
into law while vacationing in California on August 13, 1981.
(AP/Wide World Photos)