The Economic Recovery Tax Act was a piece of legislation enacted in the United States in 1981. Its primary goal was to stimulate the economy by reducing taxes for individuals and businesses. The act aimed to encourage investment and spending, which were seen as essential for economic growth during a period of recession. Key features of the act included significant tax cuts, particularly for higher-income earners, and incentives for businesses to invest in capital. The legislation was part of a broader economic strategy associated with President Ronald Reagan, known as "Reaganomics," which emphasized supply-side economics to boost the economy.