To: cosmicforce who wrote (480049 ) 9/24/2021 5:07:05 PM From: Sam 1 RecommendationRecommended By
Respond to Wikipedia has a nice overview of the history of the income tax in the US since it was enacted in 1913. Here is an excerpt. IMHO, all we need to do is enact a steeply progressive income tax as well as raise the SS cap and add another 1 or 2% to the Medicare tax. But since so many people think it would be so unfair to our .01%, it would be very difficult to do. People are really really dumb.Revenue Act of 1913 , levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000, equivalent of $16,717,815 in 2018 dollars [19] ) to finance World War I . The average rate for the rich however, was 15%. [20] The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925 and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% in 1944 [21] (on income over $200,000, equivalent of $2,868,625 in 2018 dollars [22] ). During World War II, Congress introduced payroll withholding and quarterly tax payments. [23] [24] [25] [26] The top marginal tax rate was lowered to 50% in 1982 and eventually to 28% in 1988. It slowly increased to 39.6% in 2000, then was reduced to 35% for the period 2003 through 2012. [23] Corporate tax rates were lowered from 48% to 46% in 1981 ( PL 97-34 ), then to 34% in 1986 ( PL 99-514 ), and increased to 35% in 1993, subsequently lowered to 21% in 2018. Timothy Noah, the senior editor of the New Republic, argues that while Ronald Reagan made massive reductions in the nominal marginal income tax rates with his Tax Reform Act of 1986, this reform did not make a similarly massive reduction in the effective tax rate on the higher marginal incomes. Noah writes in his ten-part series entitled "The Great Divergence," that in 1979, the effective tax rate on the top 0.01 percent of taxpayers was 42.9 percent, according to the Congressional Budget Office, but that by Reagan's last year in office it was 32.2%. This effective rate on high incomes held steadily until the first few years of the Clinton presidency when it increased to a peak high of 41%. However, it fell back down to the low 30s by his second term in the White House. This percentage reduction in the effective marginal income tax rate for the wealthiest Americans, 9%, is not a very large decrease in their tax burden, according to Noah, especially in comparison to the 20% drop in nominal rates from 1980 to 1981 and the 15% drop in nominal rates from 1986 to 1987. In addition to this small reduction on the income taxes of the wealthiest taxpayers in America, Noah discovered that the effective income tax burden for the bottom 20% of wage earners was 8% in 1979 and dropped to 6.4% under the Clinton Administration. This effective rate further dropped under the George W. Bush Administration. Under Bush, the rate decreased from 6.4% to 4.3%. [27] These figures also correspond to an analysis of effective tax rates from 1979–2005 by the Congressional Budget Office . [28] en.wikipedia.org
