Taxpayer Relief Act Of 1997

The Big Betty of tax breaks, one of the largest tax cuts in U.S. history: the Taxpayer Relief Act of 1997.

Signed into law by Clinton, the act introduced the Child Tax Credit, a $400 tax credit for every minor in 1998 (and $500 a pop in 1999...except for the super-rich).

The act also cut long-term (1+ year) capital gains rates by 8%, making it 20%. That means you got to keep 8% more money from investments when you cash out on them.

Ever heard of those little things called Roth IRAs? Well, they were established under the Taxpayer Relief Act of 1997. Unlike traditional IRAs, Roth IRA contributions are not tax-deductible. However, you don’t have to pay capital gains taxes on any of your Roth IRA income when you take it out later in retirement. Additionally, you can take out the direct contributions to your Roth IRA with no penalty at any time (just the principle...not the interest). So, yeah. It's a big deal.

Thanks to the Taxpayer Relief Act of 1997, you could also be exempt from capital gains taxes when selling a residence of up to $500 for couples and half that for singles, assuming you lived in the place for at least two of the last five years.
The estate tax exemption, which was already $600k, rose to $1 million by 2006, and family farms and small businesses got exemptions, too.

Tax cuts...and drinks...all around. We’ll leave that growing national debt to the kiddos.