ABSTRACT
The most notable changes in the personal income tax are the changes in the marginal rates and the indexing of the tax brackets beginning in tax year 1985. The maximum tax credit for child care is increased from $2,000 to $2,400 for taxpayers with one dependent and double those amounts for taxpayers with two or more dependents. Corporate tax rates were lowered, and numerous changes were made in the way that corporate income is calculated. The tax act made changes in the provisions for gift and estate taxation that significantly reduce the taxation of these asset transfers. Prior law allowed issuance of federal income tax-exempt bonds for the construction of mass transit facilities that were owned by a private firm or individual and leased to local governments. A "tax straddle" is the purchase or sale of substantially equivalent securities, particularly commodities contracts, in both the long term and the short term.
