 Ronald Reagan made very large reductions in the nominal marginal income tax rates with his Tax Reform Act of 1986, which did not make a similarly large reduction in the effective tax rate on marginal incomes.Noah writes in his ten part series entitled "The Great Divergence," that "in 1979, the effective tax rate on the top 0.01 percent was 42.9 percent, according to the Congressional Budget Office, but by Reagan's last year in office it was 32.2%.