The 'Real' Tax Rates on Top Earners

The top rate for the federal Individual Income Tax was 91 percent in 1963. In 1965 Congress lowered the top rate to 70 percent, in memory of JFK who had floated the idea. Then Ronaldus Magnus charmed Congress into lowering the top rate to 50 percent in 1982. Reagan again scored in 1988, when the top rate went to 28 percent. Through the good graces of two or our more popular presidents, the top rate on personal income taxes fell by 63 percent in 23 years (source). But the top rate soon began creeping up. In 1991 Bush the elder broke his "read my lips" pledge and the top rate went to 31 percent, and in 1993 under Clinton the rate went to 39.6 percent, retroactively as it were. Then along came W., who ratcheted the top rate back down to 35 percent in 2003, where it has since remained. So there you have it, a condensed history of the top rate on personal income taxes going back to the 1950s. Actually, the story on tax rates is a little more complicated than this. You see we've only been...(Read Full Post)