The United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 Revenue Act of 1978, , amended the Internal Revenue Code

Internal Revenue Code

The Internal Revenue Code is the domestic portion of Federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 of the United States Code...

 by reducing individual income tax

Income tax

An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...

es (widening tax bracket

Tax bracket

Tax brackets are the divisions at which tax rates change in a progressive tax system . Essentially, they are the cutoff values for taxable income — income past a certain point will be taxed at a higher rate.-Example:Imagine that there are three tax brackets: 10%, 20%, and 30%...

s and reducing the number of tax rates), increasing the personal exemption from $750 to $1,000, reducing corporate tax

Corporate tax

Many countries impose corporate tax or company tax on the income or capital of some types of legal entities. A similar tax may be imposed at state or lower levels. The taxes may also be referred to as income tax or capital tax. Entities treated as partnerships are generally not taxed at the...

 rates (the top rate falling from 48 percent to 46 percent), increasing the standard deduction from $3,200 to $3,400 (joint returns), increasing the capital gains exclusion from 50 percent to 60 percent (effectively reducing the rate of taxation on realized capital gains to 28%), and repealing the non-business exemption for state and local gasoline

Gasoline

Gasoline , or petrol , is a toxic, translucent, petroleum-derived liquid that is primarily used as a fuel in internal combustion engines. It consists mostly of organic compounds obtained by the fractional distillation of petroleum, enhanced with a variety of additives. Some gasolines also contain...

 taxes.

The Act was passed by the 95th Congress

95th United States Congress

The Ninety-fifth United States Congress was a meeting of the legislative branch of the United States federal government, composed of the United States Senate and the United States House of Representatives. It met in Washington, DC from January 3, 1977 to January 3, 1979, during the first two years...

 and was signed into law by President

President of the United States

The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....

 Jimmy Carter

Jimmy Carter

James Earl "Jimmy" Carter, Jr. is an American politician who served as the 39th President of the United States and was the recipient of the 2002 Nobel Peace Prize, the only U.S. President to have received the Prize after leaving office...

 on November 6, 1978.

The Act also established Flexible spending account

Flexible spending account

A flexible spending account , also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer in the United States...

s, which allow employees to receive reimbursement for medical expenses from untaxed income dollars.