Top Historical Tax Rates in US

[Number Six]

I've been hearing a lot from politicians claiming that the top US tax rate was over 90% during the 1950s, which is not really true. Too bad Snopes didn't rebut that, but maybe taxes aren't their thing? https://mises.org/library/good-ol-days- ... 90-percent

[Famspear]

Well, according to the IRS Instructions for Form 1040, the highest marginal tax rate prescribed for individuals for tax years 1944 through 1951 was 91%. For 1952 and 1953, it was 92%. For tax years 1954 through 1963, it was 91%.

For tax year 1964, the highest marginal rate was 77%.

[Famspear]

In the late 1970s, when I began working at a CPA firm right out of college, the highest marginal tax rate for individuals was 70% for things like dividends and interest income, and 50% for personal service income (such as employee compensation for personal services).

[Burnaby49]

You think you have high tax rates? Try Britain in the 1970's with a 98% rate on investment income and 90% on normal income. I had an uncle who told me he was allowed to keep sixpence for every pound he earned.

Domestic affairs

The Second Wilson Government made a major commitment to the expansion of the British welfare state, with increased spending on education, health, and housing rents. To pay for it, it imposed controls and raised taxes on the rich. It partially reversed the 1971 reduction in the top rate of tax from 90% to 75%, increasing it to 83% in the first budget from new chancellor Denis Healey, which came into law in April 1974. Also implemented was an investment income surcharge which raised the top rate on investment income to 98%, the highest level since the Second World War.

https://en.wikipedia.org/wiki/Harold_Wilson

[JamesVincent]

I've been hearing a lot from politicians claiming that the top US tax rate was over 90% during the 1950s, which is not really true. Too bad Snopes didn't rebut that, but maybe taxes aren't their thing? https://mises.org/library/good-ol-days- ... 90-percent

There is a world of difference between tax rate and marginal tax rate, been a discussion on here many a time. As far as Snopes rebutting it, don't hold your breath. Snopes has become increasingly political as time goes on, to the point where several other fact checkers have done articles on just how bad they distort the truth on political arguments.

[Famspear]

I've been hearing a lot from politicians claiming that the top US tax rate was over 90% during the 1950s, which is not really true. Too bad Snopes didn't rebut that, but maybe taxes aren't their thing? https://mises.org/library/good-ol-days- ... 90-percent

There is a world of difference between tax rate and marginal tax rate, been a discussion on here many a time. As far as Snopes rebutting it, don't hold your breath. Snopes has become increasingly political as time goes on, to the point where several other fact checkers have done articles on just how bad they distort the truth on political arguments.

Yes, as James notes, there is a difference between the highest marginal tax rate and the effective rate.

In fairness to Mises, they do seem to have used the correct term of "highest" rate when referring to the 90%+ rates.

[Gregg]

There is a world of difference between tax rate and marginal tax rate, been a discussion on here many a time.

For instance, if you had a marginal tax bracket of 25% for income over $1 million, but no taxes on the first $999,999, one who earned $1,100,000 would only owe $25K, for an effective tax RATE of 0.22%

Just to illustrate the difference.