Click to enlarge:

Source: Visualizing Economics

 

 

Nicely done poster from Catherine Mulbrandon, who presented at TBP Conference last year.

Category: Digital Media, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

34 Responses to “Historical US Tax Rates Poster”

  1. perpetual_neophyte says:

    I would love to see this along with something like “average effective tax rate” – especially if it was broken down by income strata.

  2. DarthBeta says:

    Yes, nicely done; simple and so visually pleasing!
    It is helpful to remember taxes are paid with goods, money and things and the unti of exchange has changed over time: sons to fight wars, food and goods to the king’s armies, bi-metal based currencies, fiat currencies, ect.
    The focus should be on the value of the exchange (in which taxes are paid in) and inflation.
    Nothing insidious about keeping the discussion focused on tax rates.

  3. MorticiaA says:

    BR: you had this on TBP sometime last year as well. At that time, I printed it and hung it on my office door for all to see – it remains there today (I am an Independent voter surrounded by Red ones). Almost everyone (except one) who sees it makes an “aha” sound when they study it closely.

    As for the one exception, his comment was that 1986 TRA cuts took away the juicy real estate passive activity losses – that was his way of keeping his G.O.P. agenda relevant to the discussion (which I did not ask to have with him in the first place).

  4. lonr505 says:

    Irony is that a lot of Americans (especially those over 50 and those right of center) would point to the Eisenhower years as some sort of halycon, idealized time in American history when everything was right with the world.

  5. hawks5999 says:

    I’d like to see this going back to 1900.

  6. wally says:

    The other side of the ledger is: what do we get for the taxes we pay.
    It seems to me it is far, far more today that it was in the early 1930′s, which is the last time rates were this low.
    So government is a tremendous bargain today. In fact, it is probably a loss leader – it is probably not sustainable at the price we pay now.

  7. machinehead says:

    ‘I’d like to see this going back to 1900.’ — hawks5999

    The Sixteenth (income tax) amendment was only ratified (under questionable circumstances) in 1913.

    Its promoters promised that the tax would affect only the super-rich, never touching the working person.

    The joke was on us.

  8. stonedwino says:

    So the last time capital gains taxes and corporate taxes were this low was the Depression? Solution seems very simple to me….you pay now bitch!

  9. stcharlesvoter says:

    Income tax down but property tax, sales tax, government fees all way up. I live in Illinois where state income tax rose 66% last year. It seems at the least misleading picking three taxes without considering all the other government sources of revenue including highway tolls and even speeding tickets. These three federal taxes can go to zero if you just reallocate taxes under different names. In the end it is a game of how much state and federal and local government take vs spend.

  10. Defining Quality says:

    Tax all Net Worth above $10,000,000 at 100% world wide and watch the corruption in banking and government go away!!
    The new world has little use for the CentaMillionaire$ and Billionaire$ whom collectively are an ever increasing scourage upon the 7,125,000,000 individuals consumer citizens of the same world who are not Billionaire$ or the less well endowed CentaMillionaire$.

  11. M says:

    So, the 49% top bracket proposed in the “Progressive” budget would hardly be unprecedented: http://cpc.grijalva.house.gov/index.cfm?sectionid=70&sectiontree=5,70

    The progressives have certainly been comprehensively defeated in the national dialog.

  12. rd says:

    So the only other time in the last century when rates were this low was 1925-1933. That appears to have worked as well then as well as the past decade.

    When can we get rid of the “trickle-down” economic myth? How much more data do we need? Although maybe we do need to repeat a 90% reduction in the DJIA and 25% unemployment to really prove the case again.

  13. philipat says:

    Of course, those Corporate tax rates are only “Theoreetical”. Ask GE.

  14. socaljoe says:

    The rise in federal taxes seems to coincide with the birth of the welfare state in the 30′s and the warfare state in the 40′s.

    The decline in federal taxes seems to coincide with the elimination of the gold standard in ’71 facilitating federal funding by foreign central banks and money printing in lieu of taxation.

  15. TLH says:

    The problem with our tax code is that people feel the rich get a better deal. Our tax code is too complicated. All politicians want to give special breaks to certain people or classes. Look at Rubio wanting to give gold medalists a special deal. Treat everybody the same, but I believe in a graduated tax. No deductions. Income is income. Simplify, simplify, simplify. What is important is raising your net worth, not doing some dumb deal to get a tax break.

  16. ancientone says:

    Please note that the decrease in income tax rates for the rich in the twenties begat the bubble in stocks that when burst caused the crash of 1929 and the following depression, and the income tax rate cuts for the rich of Reagan and Bush Jr. begat the bubble in real estate that when burst caused the crash of 2008 and our current economic situation.

  17. KVL in CLT says:

    I’d like to see a chart of outstanding Federal debt overlayed here, as the “true” tax burden might reasonably be considered to equal both taxes collected and funds borrowed.

  18. mfalke says:

    Something very important that’s being missed by those drawing conclusions from this chart. This chart is the TOP marginal tax rate. The top rate of 91% in the 1950s affected a much smaller percentage of the population than the 35% rate does now. Since then the top tax rate has generally been changed to include a larger and larger percentage of the population.

  19. victor says:

    Here we are in a Big Picture, macro type blog, viewing top marginal tax rates and their variation over the past 100 years or so and wondering whether they should be higher today?

    Speaking for the masses of the non-rich, from and earlier post by BR on “where are you in the economic strata”:

    In Helsinki, we got into a fascinating conversation within a small group of locals about that tax rate. The national and local income tax, real estate taxes, state sales tax, and then the VAT tax mean that a 70% tax rate (versus gross income) was pretty typical. That seemed astonishingly high to me. But someone pointed out that once you add in the costs of health care, student loans, retirement investments, etc. — all the things state pay for with that 70% rate — an American making less than $100k ended up with about the same 30% net as the Finns do.

    Further see this link on how much tax do we REALLY pay apropos of stcharlesvoter comment on speeding tickets (parking too) as a revenue raising method, not to mention a plethora of other extractions from the pockets of the masses into the coffers of various Governments:

    http://nowandfutures.com/taxes.html

  20. DeDude says:

    @M;

    Yes the only budget that seriously takes a stab at solving our problems by reducing the national debt is also the one that is completely ignored in the corporate media. Instead we are having debates about alternative plans that have more or less unrealistic assumptions as the only way to get to their goals.

  21. lineside says:

    This chart is interesting but half the picture is missing and it’s hard to make any informed historical comparisons without it.
    The other half of the picture is the income brackets at which the marginal rates apply.
    The tax rates of yesteryear, in general, applied to much higher rates of inflation-adjusted income than those of today. For example, in 1933 you needed about $655k of income in today’s dollars to hit the 25% bracket; today it takes only $34,500. (and in 1933 it took $17.3 million in today’s dollars to get hit with the top 63% rate).

    http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_individual_rate_history_nominal%26adjusted-20110909.pdf

  22. Defining Quality says:

    M Says:
    “The progressives have certainly been comprehensively defeated in the national dialog.”
    That is true and its TRUE because the CentaMillionaire$ and Billionaire$ own all the Media and they own the politicians.
    We The People are manipulated into believing that we NEED these Malignant Narcissists to exist and be free. When in fact the masses have been turned into wage slaves for the sole purpose of creating ever more CentaMillionaire$ and Billionaire$! aka high net worth individuals (HNWIs)
    Every means possible is used to keep us divided! Religion being a major politically corrupting influence!
    How To Suck at Your Religion
    http://theoatmeal.com/comics/religion
    All governments since the beginning of time have existed for one purpose and one purpose only – to DECIDE who gets to keep and control the money – since the beginning of time it’s been about the money! Millions upon Millions have suffered and died to a few could “Lawfully” steal all the Money! America has become the shining example of that truth. An Empire by and for the benefit of HNWIs.
    Capitalism was a religion created by Malignant Narcissists for the primary benefit of HNWIs! A Religion established and always controlled by HNWIs! Thou Shalt Honor HNWIs. Thou Shalt NOT Tax CentaMillionaire$ and Billionaire$! Thou Shalt not Prevent HNWIs from possessing whatever they need to protect their wealth. Thou Shalt allow Accounting Control Fraud by HNWI’s and their Shills! Thou Shalt Not Prosecute any Financial corruption by or for the benefit of HNWIs. Thou shalt only vote for Political Shills selected by and for the benefit of HNWI’s. Thou Shalt Ignore Treasonous behavior by or for the benefit of HNWIs. Thou shalt honor the Elimination of Jobs when it benefits HNWIs. Thou shalt Die and Starve so HNWIs dont have to pay Social Security and Medicare taxes on all of their income!
    “Bring it on” George W!

  23. Defining Quality says:

    Inside says:
    “This chart is interesting but half the picture is missing and it’s hard to make any informed historical comparisons without it.”
    http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_individual_rate_history_nominal%26adjusted-20110909.pdf
    The most common thing about common sense is that it’s VERY uncommon!
    Question – exactly why did HNWIs get that way? Did they do it alone? Have help? Buy some politician?
    History exactly proves my Point! HNWIs are not now and never have been taxed by “We The People”!
    BECAUSE – they own ALL POLITICIANS and will they not ALLOW IT!
    Shit For Brains – The Defining Quality – of all Americans – don’t know don’t care – working as slaves for HNWIs in hopes of not loosing his home to HNWIs who want to “Lawfully” own it ALL!
    Come to think of it HNWIs already do and when Shit For Brains wake up it will get ugly – that too is History 101!

  24. rj chicago says:

    @stcharlesvoter:

    Like you I live in ILL_ANNOY and I agree. Ex. – the tolls – up 87% in the last year at the cash box from 80c to 1.50c (just saw this on the big board on the NW toll the other day). More so and the very thing that is causing my wife and I to move outta here – besides the weather and the politics – is the 66% personal income tax rise – costing me an additional 1800.00 per year out of pocket. Figuring we spend about 150.00 per week on food that is near 23% of our annual food allowance now going to the state of ILL_ANNOY and for what? – a pension time bomb that is clicking at 12.6 million dollars A DAY in increased shortfall and the IL Policy Insitute is now estimating that there is an unfunded shortfall of 83 BILLION dollars in upcoming entitlements.
    This place is gonna epic fail or see huge increases in taxes – we are gettin out of Dodge while the gettin is good. There are numerous hidden taxes that manifest themselves on a daily basis that I think this chart does not show.

  25. newulm55 says:

    I think perpetual_neophyte and other are correct to ask for the effective tax rate… but you also need to know what was the amount of tax collected in relation to GDP with the tax rates. The URL below shows that in the 1950s (where is starts) to 2008. Taxes averaged 16.9% of GDP (about where we are today) and NEVER went over 20%. What the graph really proves is that when taxes are crazy high, folks will find more ways to avoid taxes.

    http://www.deptofnumbers.com/blog/2010/08/tax-revenue-as-a-fraction-of-gdp/

  26. Defining Quality says:

    Religion Destroyed the Republican Party
    http://www.truthdig.com/report/print/religion_destroyed_the_republican_party_20120809/
    Fact is the real “Religion” of America’s Political Party’s – republican or democrat – has been the one perpetrated upon us by the HNWI’s who’s true God is Money! We are as ignorant, gullible and naive as children.
    We allow them to corrupt the World for personal profit.
    “Cultures that endure carve out a protected space for those who question and challenge national myths. Artists, writers, poets, activists, journalists, philosophers, dancers, musicians, actors, directors and renegades must be tolerated if a culture is to be pulled back from disaster.” Chris Hedges – How To Think
    http://www.truthdig.com/report/item/how_to_think_20120709/

  27. victor says:

    @ Defining Quality: calm down man! Show some respect for the land/peoples you eat your daily bread from. No more “shit for brains” please if you want any credibility here. As for Religion, yes, it is often perverted/corrupted but it also not to be confused with its enduring foundation: faith. Just like weather is not to be confused with climate, got it?

  28. Defining Quality says:

    @ victor – WTF – are you a shill for UHNWIs!
    Tax all Net Worth above $10,000,000 at 100% world wide and watch the corruption in banking and government go away!
    Instead of me calming down I suggested my 314,119,265 “Shit for brains” Fellow AmeriKans need to get mad as hell so the corrupted catering by Politically Corrupted Politicians to the Ultra High Net Worth Individuals comes to a screeching halt!
    Fact is those 314,119,265 idiots can’t think and what’s even worse they don’t even vote their own interests! Shit for brains idiots devoted to political parties that are supporting Financial corruption world wide. Corrupted Capitalism that is primarily benefiting some 40,000 Ultra High Net Worth Individuals.
    UHNWIs should not be allowed to corrupt all economic activity with their money!
    Those who have a problem with that – a fact of observed reality – define “Shit for Brains”!
    We The People – Shit for brains – coast to Coast – being abused by our own government for the benefit of a few!
    Yep we’re free – free to be lied – to free to be manipulated – and free to be stolen from!
    And that”s the American Way!

  29. victor says:

    @Defining Quality: I got it you’re under the spell of Koalemos.

  30. Defining Quality says:

    @ victor – You’re a shill – thanks for the proof!

  31. victor says:

    @Defining Quality: See this: http://www.youtube.com/watch?v=pX_WGO597-U

    They went all the way, took it all: 100% and their skin too! Worked out great.

  32. Defining Quality says:

    @ Tea Party Shill and Sociopath aka “Shit For Brains”
    http://www.youtube.com/watch?v=zdtXfcRbXUE&feature=fvwp

  33. victor says:

    I underestimated you: more like Pol Pot yet firmly Koalemos.

  34. bear_in_mind says:

    The only thing missing is a superimposed Laffer Curve. I think we’d see that the country has moved in the right direction, but the rich still aren’t garnering a large enough share of overall wealth for “trickle down” policies to be effective in benefiting the middle class. Another 10-15 percent nominal reduction should do the trick.