From 1940 - 1963 (23 YEARS!) the top marginal U.S. Income Tax Rate was 81% to 94%, & yet we became

[supraTruth]

the MOST POWERFUL & BENEVOLENT NATION THIS PLANET HAS EVER WITNESSED! Ask yourself, & ask EVERY1 in the media and government: "How could that have been possible if Grover Norquist & the CONS are right?" And ask the media to ask Grover Norquist.

Pass it on!

Partial History of
U.S. Federal Marginal Income Tax Rates
Since 1913

Applicable Income First Top
Year brackets bracket bracket Source
1913-1915 - 1% 7% IRS
1916 - 2% 15% IRS
1917 - 2% 67% IRS
1918 - 6% 77% IRS
1919-1920 - 4% 73% IRS
1921 - 4% 73% IRS
1922 - 4% 56% IRS
1923 - 3% 56% IRS
1924 - 1.5% 46% IRS
1925-1928 - 1.5% 25% IRS
1929 - 0.375% 24% IRS
1930-1931 - 1.125% 25% IRS
1932-1933 - 4% 63% IRS
1934-1935 - 4% 63% IRS
1936-1939 - 4% 79% IRS
1940 - 4.4% 81.1% IRS
1941 - 10% 81% IRS
1942-1943 - 19% 88% IRS
1944-1945 - 23% 94% IRS
1946-1947 - 19% 86.45% IRS
1948-1949 - 16.6% 82.13% IRS
1950 - 17.4% 84.36% IRS
1951 - 20.4% 91% IRS
1952-1953 - 22.2% 92% IRS
1954-1963 - 20% 91% IRS
1964 - 16% 77% IRS
1965-1967 - 14% 70% IRS
1968 - 14% 75.25% IRS
1969 - 14% 77% IRS
1970 - 14% 71.75% IRS
1971-1981 15 brackets 14% 70% IRS
1982-1986 12 brackets 12% 50% IRS
1987 5 brackets 11% 38.5% IRS
1988-1990 3 brackets 15% 28% IRS
1991-1992 3 brackets 15% 31% IRS
1993-2000 5 brackets 15% 39.6% IRS
2001 5 brackets 15% 39.1% IRS
2002 6 brackets 10% 38.6% IRS
2003-2011 6 brackets 10% 35% Tax Foundation

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_federal_income_tax

[yardwork]

1. Reagan was elected in 1980 and the taxes of the wealthy came tumbling down.

And we see where that's gotten us.

K&R

[former9thward]

3. From the chart it looks like it started with Kennedy.

[yardwork]

4. I'm not seeing that. Yes, the top level went down, but not drastically until after 1981.

It would be easier to see graphically. It looks like it went steadily up, then sometime down, then steeply down under Reagan.

[jmowreader]

6. Kennedy was a one-time deal that will never happen again

In 1945, the top rate was set in the 90 percent range to pay for World War II. After the bills were paid, there wasn't any need to have the taxes that high. Kennedy just lowered taxes enough to remove the World War II money from the budget.

This was a magical tax cut: it put a LOT of money into the hands of businesses and individuals just when computers were starting to get cheap enough that any large company could afford to have one--and, as far as the government was concerned, it wasn't a tax cut at all because expenses (war spending, in this case) and revenues both fell by the same amount.

This situation will never happen again, but that hasn't stopped the Republicans from using Kennedy's cut to prove how much Democrats love tax cuts.

[former9thward]

13. War Spending?

"because expenses (war spending, in this case) and revenues both fell by the same amount." What war spending was ending in 1963? Also revenue went up not down. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=203

[hootinholler]

9. Johnson

I suspect it was in part to buy medicare.

-Hoot

[RZM]

2. I agree we should raise the rates

But I also think that our rivals were all seriously devastated by the war, which goes a long way to explaining our postwar dominance. Plus there are plenty of people here who would argue that US foreign policy during that period was anything but 'benevolent.'

[badtoworse]

5. You're only telling half the story. The tax code was very different then.

There were many more deductions and many abusive tax shelters. You could shelter most, if not all of your income and not pay the high marginal rates.

To compare those rates to rates today is not a fair comparison. You need to look at percent of income actually paid in taxes at various income levels (adjusted for inflation) to get a meaningful comparison.

[supraTruth]

7. Do U REALLY believe that tax shelters & deductions are not as numerous today?

[badtoworse]

8. Yes. Please PM me if you know of any that are as good as the pre-1986 shelters

[JHB]

10. The major effect of the high marginal rates wasn't the direct levy on the wealthy...

...it was the damping effect (even with al the loopholes) on how fast the rich could get rich-er, and on the ways they could do it. Lower taxes on big payoffs encouraged speculation, liquidating companies that were profitable but not "profitable enough", and squeezing the employees to maximize profits.

With the higher rates, you could get more bang for the buck by reinvesting profits back into the company rather than extracting them and having to hand over a hefty chunk of it to Uncle Sam. And some of that reinvestment was in the form of better pay for employees.

Yes, the situation was more complicated (people could and did write books on it), but the topheavy rates -- ironically -- were a market-based check and balance on great wealth: constrict how fast it could be concentrated upward, and it circulated more freely at lower levels.

[JHB]

11. Full historical brackets (not just the top rates can be found...

here:
http://www.taxfoundation.org/publications/show/151.html

[Major Hogwash]

12. This is veritas!!! Why can't the American people see through the smokescreen of corporatism!!

They have been mesmerized and act like sheep voting against their best interests on false promises of social changes that will NEVER be repealed!!!!

[sammytko]

14. Only 1 person was taxed at the highest rate - John D. Rockefeller

according to my history professor.

[Motown_Johnny]

15. Who was your history professor? Glenn Beck?

[sammytko]

16. nope

very liberal guy - just stating facts

[21st Century FDR]

17. First, all the loopholes must be eliminated

THEN, and only then after that...

1) Roll back the Chimp tax cuts

2) Roll back the Reagan tax cuts

3) Re-establish the estate tax. The exact rate can be negotiated later, but it should be 100% on any money not actually earned by the recently dead person. It's time to put an end to this pseudo-royalty perpetual inheritance wealth bullshit that allows complete fucking morons like Chimpy Bush and Paris Hilton to have easy lives at our expense.