From Wikipedia, the free encyclopedia - View original article
The act increased the percentage standard deduction to 16% ($2,800 max) and minimum standard deduction to $2,100 (joint returns). The general tax credit (max of $35/capita or 2% of $9,000 income) was temporarily extended and small business tax rates were temporarily lowered through 1977.
The act delayed the decrease in the investment tax credit through 1980, expanded the individual minimum tax, and increased the long term capital gains holding period from 6 months to 1 year.
A unified rate schedule for the estate and gift taxes with a $175,000 exemption was created.
The previous major tax legislation (Tax Reform Act of 1969) had established a 10% minimum tax and while it had left long-term capital gains under $50,000 to continue to qualify for the 25 percent alternative capital gains tax rate, it increased the rate on gains over $50,000 to 29.5 percent in 1970, 32.5 percent in 1971, and 35 percent (one-half the 70 percent top tax rate applicable to ordinary income) in 1972 and later years.
This Act increased the minimum tax rate to 15%. The Act also increased the holding period defining long-term capital gains, which receive preferential tax treatment, from six months to one year.