Skip Navigation
Understanding Taxes - Student Understanding Taxes home page The Whys of Taxes Tab The Whys of Taxes Tour Activities Main Tab The Hows of Taxes Tab Help Glossary Links Site Map Tax Trivia VITAe3
The Whys of Taxes

Theme 2: Taxes in U.S. HistoryLesson 7: Tax Reform in the 1990s and 2000s


President George W. Bush

Three important acts of tax legislation from 1990-2009 were aimed at reducing the tax burden on individual taxpayers, small businesses, and corporations.

In 1997, President Clinton and Congress enacted the Taxpayer Relief Act.

The key measures included:

  • A child tax credit of $500 (later increased to $1,000) per child per year
  • Two nonrefundable education tax credits:
    • The Hope credit for the first two years of postsecondary education (later replaced with the four-year American Opportunity credit)
    • The Lifetime Learning credit for any number of years

In 2001, President Bush and Congress passed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). The Act increased the child tax credit and expanded the education credits.

The Act created the Child and Dependent Care tax credit for employer-provided childcare expenses, and increased the existing dependent care and adoption credits.

President Obama and Congress passed the American Recovery and Reinvestment Act of 2009 (ARRA, or Recovery Act). The purpose of ARRA was to create and save jobs, jumpstart the economy, and build the foundation for long-term economic growth. To put more money in the pockets of consumers, ARRA also:

  • Increased the First-Time Homebuyer credit
  • Created the refundable Making Work Pay credit
  • Replaced the Hope credit with the refundable American Opportunity tax credit


quick check
Which credit helped pay for childcare expenses?

tax trivia
Did You Know?
Some taxpayers received a rebate check between $300 and $600 in 2008 due to the 2008 Bush economic stimulus package and, in 2009, they received a paycheck increase due to the Making Work Pay credit.

Test your tax trivia knowledge by answering the multiple-choice question. Click on the correct answer. To assess your answer, click the Check My Answers button.
Which credit gave individual wage earners a tax credit of up to $400?
  • A.
  • B.
  • C.
  • D.

tell us what you think!

User SurveyPlease take a few minutes to complete a very short Understanding Taxes user survey. Your thoughts and opinions will help us continue to meet the needs of educators and students.