We’ve Come A Long Way
October 28, 2005
As the President’s Tax Reform Panel prepares to release its report, it is interesting to look back at how far the tax code has progressed. In 1963 the U.S. had a top rate of 91 percent on income over $200,000! As recently as 1981 the top rate was 70 percent on income over $107,700.
If the current tax system was the same as it was in 1963, individuals earning over $1,298,285 would pay the top rate of 91 percent. If the current system was the same as in 1981, individuals earning over $235,477 would be hit with the top 70 percent rate.
The consensus prediction is that the panel will release a four bracket income tax system with a top rate in the 33 to 35 percent range. This potential system is infinitely better than those in the past that taxed high levels of income so punitively.