The previous major tax legislation (
Tax Reform Act of 1969) had established a 10% minimum tax and while it had left long-term capital gains under $50,000 to continue to qualify for the 25 percent alternative capital gains tax rate, it increased the rate on gains over $50,000 to 29.5 percent in 1970, 32.5 percent in 1971, and 35 percent (one-half the 70 percent top tax rate applicable to ordinary income) in 1972 and later years. This Act increased the minimum tax rate to 15%. The Act also increased the holding period defining long-term
capital gains, which receive preferential tax treatment, from six months to one year. == References ==