The Good ‘Ol Days of the Personal Income Tax
You may have heard people refer to the 1950’s as a great decade, a decade of prosperity and high employment. You may also have heard a politician or two, as well as religious leaders, talk about “getting back to the values of the 1950’s”.
One thing is for certain – the federal government had plenty of tax revenue to work with in terms of providing scientific research, transportation infrastructure, etc.
Just take a look at the progressive tax rates for personal income tax for unmarried taxpayers per income bracket in the 1950’s:
The 1954 Code
|
Income level |
Tax rate |
2008 PPC Adjusted Income |
|
up to $2,000.00 |
20% |
up to $37,500.00 |
|
$2,000.01 – $4,000.00 |
22% |
$37,500.01 – 75,000 |
|
$4,000.01 – $6,000.00 |
26% |
$75,000.01 – 112,500 |
|
$6,000.01 – $8,000.00 |
30% |
$112,500.01 – 150,000 |
|
$8,000.01 – $10,000.00 |
34% |
$150,000.01 – 187,500 |
|
$10,000.01 – $12,000.00 |
38% |
$187,500.01 – 225,000 |
|
$12,000.01 – $14,000.00 |
43% |
$225,000.01 – 262,500 |
|
$14,000.01 – $16,000.00 |
47% |
$262,500.01 – 300,000 |
|
$16,000.01 – $18,000.00 |
50% |
$300,000.01 – 337,500 |
|
$18,000.01 – $20,000.00 |
53% |
$337,500.01 – 375,000 |
|
$20,000.01 – $22,000.00 |
56% |
$375,000.01 – 412,500 |
|
$22,000.01 – $26,000.00 |
59% |
$412,500.01 – 487,500 |
|
$26,000.01 – $32,000.00 |
62% |
$487,500.01 – 600,000 |
|
$32,000.01 – $38,000.00 |
65% |
$600,000.01 – 712,500 |
|
$38,000.01 – $44,000.00 |
69% |
$712,500.01 – 825,000 |
|
$44,000.01 – $50,000.00 |
72% |
$825,000.01 – 937,500 |
|
$50,000.01 – $60,000.00 |
75% |
$937,500.01 – 1,125,000 |
|
$60,000.01 – $70,000.00 |
78% |
$1,125,000.01 – 1,312,500 |
|
$70,000.01 – $80,000.00 |
81% |
$1,312,500.01 – 1,500,000 |
|
$80,000.01 – $90,000.00 |
84% |
$1,500,000.01 – $1,687,500 |
|
$90,000.01 – $100,000.00 |
87% |
$1,687,500.01 – $1,875,000 |
|
$100,000.01 – $150,000.00 |
89% |
$1,875,000.01 – $2,812,500 |
|
$150,000.01 – $ 200,000.00 |
90% |
$2,812,500.01 – $3,750,000 |
|
$200,000.01 or more |
91% |
$3,750,000.01 or more |
Wow! Twenty-four income brackets with corresponding marginal tax rates from 20% to 91%. Can you imagine if those tax rates were in effect now?
And what did Mitt Romney pay in income tax? It was about 15%, wasn’t it? And Warren Buffet pays less than that. Thanks to the “common-sense tax reforms” Reagan started and Bush finished. It wasn’t reform, it just lowered the tax rate on the really wealthy people. We would have no deficit if we went back to the income tax rates of 1954.
I vote to go back to these tax rates. The lower class and middle class people deserve a break. The rich don’t deserve any more tax breaks.
I can imagine if those tax rates were in effect now. I certainly can imagine.
I had no idea. No wonder the country was in such good fiscal shape back then.
Really puts the current budget and deficit problems in perspective. The push to reduce taxes on the wealthy to a fraction of what those were historically is killing the long-term economic health of the U.S.
Very good article, really shows how the rich have been able to have their way in terms of paying less tax over the last several decades. Thank you! Awesome read.