Tax Reform Reform Act of 1988

Tax Reform Reform Act of 1988 - Repeals provisions of the Tax Reform Act of 1986 that eliminated: (1) the income tax deduction for two-earner married couples; and (2) income averaging.

Amends the Internal Revenue Code to: (1) permit a deduction for two-earner married couples equal to five percent of the lesser of $20,000 or the qualified earned income of the lesser earning spouse; (2) allow income averaging for noncorporate taxpayers engaged in farming on a regular, continuous, and substantial basis; (3) increase the maximum individual income tax rate from 28 percent to 38.5 percent; (4) eliminate the phase-out of personal exemptions; and (5) include net capital gain in the calculation of taxable income for purposes of the phase-out of the 15 percent rate (resulting in a maximum 28 percent tax rate with respect to the long-term capital gains of individuals).