Monday, November 22, 2010

Federal Income Tax Rates Over the Years

Think taxes are high now? Take a look at historical federal income tax rates through the years, 1913 to 2010.

From the Tax Foundation:
"U.S. Federal Individual Income Tax Rates History, 1913-2010"
http://www.taxfoundation.org/publications/show/151.html

Download the PDF file of the report to see the data more clearly.

Notice the initial top rate in 1913 was only 7%. But politicians have always been the same, weasels all of them. It only took three years before they raised the top marginal rate to 15%. And then the following year, in 1917, they raised the top marginal rate to 67%. Sixty-seven-fucking-percent!!! They didn't stop there. In 1918 the top rate was 77%.

Some sanity returned in 1927, when the top marginal rate was lowered to 25% This didn't last long, though. In 1932 we were back up to 63%. And in 1936 it was all the way up to 79%. In 1944 the top marginal rate was all the way up to 94%! And this was for all income above $200,000, whereas the top marginal rate in 1917 (67%) only kicked in at $2,000,000 or above!

Top marginal rates remained above 90% for a decade and a half, and stayed high (70%) for a decade after that.

Top rates dropped to 50% in 1982 and to 28% in 1988, both under Reagan. The economy took off. Our top marginal rate is currently at 35%.

The sad truth is that while our government takes in a lot of money now, our top marginal federal income tax rate today is actually fairly low by historical standards.

2 comments:

  1. I can't believe you're complaining about peak tax rates at the height of WW1 and WW2 and the Cold War! War is expensive - someone had to pay for the equipment. Would you prefer the USA had lost those wars?? And the "sanity" of 1927 was followed by a very famous stock crash... It seems you could greatly benefit from learning something about US history!

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  2. Yeah, it was the tax rates that caused the Great Depression. Sure it was...

    You also have a rather poor grasp of the difference between tax rates and tax collections.

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