Kemp-Roth Tax Cut Act Law and Legal Definition

The Kemp-Roth Tax Cut Act of 1981 is a U.S federal statute. The Act amended the Internal Revenue Code of 1954. This Act aims to encourage the economic growth through:

1. reduction of individual tax rates;

2. expensing depreciable property; and

3. incentives for savings and other small businesses.

Main features of the Act are:

1. reduction of tax rates by 25% over three years;

2. accelerated depreciation deductions;

3. indexed individual income tax parameters;

4. exclusion of income of two earner married couple by 10 %;

5. reduction in windfall profit taxes; and

6. expanded provisions for employees stock ownership plans.