Omnibus Budget Reconciliation Act of 1990
The Omnibus Budget Reconciliation Act of 1990 (or OBRA-90) was designed to reduce the United States federal budget deficit. It created a new 31 percent individual income tax rate, and capped the capital gains rate at 28 percent. Personal exemptions were temporarily phased out through 1995. The income cap on Medicare taxes was raised from $53,400 to $125,000. Itemized deductions were temporarily limited through 1995. The gasoline tax was temporarily extended and increased through September 30, 1995. Air transportation excise taxes were extended and increased through 1995. The telephone excise tax was permanently extended. It was signed into law by President George H.W. Bush on November 5, 1990, in violation of a 1988 campaign promise on his part not to raise taxes. This became an issue in the presidential election of 1992.
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