The United States Revenue Act of 1978, Pub. L. No. 95-600, 92 Stat. 2763 (Nov. 6, 1978), amended the Internal Revenue Code by reducing individual income taxes (widening tax brackets and reducing the number of tax rates), increasing the personal exemption from $750 to $1,000, reducing corporate tax 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, and repealing the non-business exemption for state and local gasoline taxes. The Act was passed by the 95th Congress and was signed into law by President James Carter on November 6, 1978. The Act also established Flexible spending accounts, which allow employees to receive reimbursement for medical expenses from untaxed income dollars.
Inflation-adjusted numbers
Corrected for inflation by CPI:
| 1978 dollars | 2005 dollars |
|---|---|
| $750 | $2,247 |
| $1,000 | $2,995 |
| $3,200 | $9,585 |
| $3,400 | $10,184 |
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