Which act, passed in 1981, is known for reducing federal income taxes?

The Economic Recovery Tax Act of 1981 is known for its significant role in reducing federal income taxes. This legislation was part of President Ronald Reagan's broader economic program aimed at stimulating economic growth through tax cuts, which he believed would encourage investment and increase consumer spending. The act implemented substantial reductions in individual income tax rates over a three-year period and aimed to reduce the top marginal tax rate. By promoting tax relief, the act sought to bolster the economy during a period marked by high inflation and unemployment, often referred to as "stagflation."

While other acts mentioned may have addressed various aspects of taxation or social policy, they were not primarily focused on reducing federal income taxes. The Tax Reform Act, for instance, was aimed more at simplifying the tax code and closing loopholes rather than significantly cutting tax rates. The Affordable Care Act and Social Security Amendments also do not pertain to income tax reductions, as they primarily focused on healthcare reform and social security benefits, respectively. Thus, the Economic Recovery Tax Act stands out as the clear answer regarding significant federal income tax reduction in 1981.