{"id":30294,"date":"2010-12-05T16:00:43","date_gmt":"2010-12-05T21:00:43","guid":{"rendered":"http:\/\/thesocietypages.org\/socimages\/?p=30294"},"modified":"2011-11-21T02:26:31","modified_gmt":"2011-11-21T07:26:31","slug":"historical-comparison-of-top-tax-brackets","status":"publish","type":"post","link":"https:\/\/thesocietypages.org\/socimages\/2010\/12\/05\/historical-comparison-of-top-tax-brackets\/","title":{"rendered":"Historical Comparison of Top Tax Brackets"},"content":{"rendered":"

To provide a little context to the current discussion about extending the Bush-era tax cuts, the New York Times<\/em> has an interesting graph<\/a> up that shows changes in the level at which the top tax bracket kicked in, as well as the % tax rate in the top bracket:<\/p>\n

\"\"<\/a><\/p>\n

So on the one hand, in constant dollars, you used to have to be quite a bit richer before you hit the top marginal tax bracket, because we had a wider range of brackets and differentiated incomes more than we do now (taxing an income of $500,000 differently than one of $5 million, whereas now we’ve basically collapsed all those brackets). But now, the highest income tax rate is well under half of what it was in the ’50s.<\/p>\n

This chart shows the incomes and tax levels of the 10 Americans with the highest salaries<\/a> (as opposed to wealth from investments, capital gains, etc.) in 1941, data we have because in 1943 President Roosevelt asked for a report on top earners:<\/p>\n

\"\"<\/a><\/p>\n

I keep hearing news organizations discuss the existing tax cuts, and their possible extension, in a way that seems a bit confusing, by saying it’s a tax cut for people making “up to” $250,000, or $500,000, or however much the cap is for the different plans being thrown around. That seems to imply that, say, everyone making $250,000 or less gets a tax cut, and anyone making $250,001 gets nothing at all. Just to clarify, under all these plans, everyone<\/em> would receive (or, more accurately, keep the existing) cut on their first $250,000 (or whatever the chosen cutoff would be).<\/p>\n

At issue is whether that same tax rate should apply to all<\/em> income, or whether beyond a chosen cutoff, the Bush tax cuts would expire. In that case, if you made $300,000, say, you would keep the tax cuts on your first $250,000 in income (and thus pay roughly 35% in taxes), but pay a higher rate on that last $50,000 (about 39%). You wouldn’t pay the higher tax rate on your entire income. And I think that’s getting lost a bit in the use of phrases like “middle class tax cuts” or “tax cuts up to X dollars.” That’s separate from whether or not you think extending the tax cuts are a good idea, but I just wanted to take a second to clarify what I think is an easily misunderstood point, made worse by the way it’s being reported on.<\/p>\n","protected":false},"excerpt":{"rendered":"

To provide a little context to the current discussion about extending the Bush-era tax cuts, the New York Times has an interesting graph up that shows changes in the level at which the top tax bracket kicked in, as well as the % tax rate in the top bracket: So on the one hand, in […]<\/p>\n","protected":false},"author":50,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[36,253,85],"class_list":["post-30294","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-economics","tag-history","tag-politics"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/30294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/users\/50"}],"replies":[{"embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/comments?post=30294"}],"version-history":[{"count":3,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/30294\/revisions"}],"predecessor-version":[{"id":30299,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/posts\/30294\/revisions\/30299"}],"wp:attachment":[{"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/media?parent=30294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/categories?post=30294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thesocietypages.org\/socimages\/wp-json\/wp\/v2\/tags?post=30294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}