Interesting fact: Tax brackets from 40 years ago...1978.

[roamer65]

https://www.tax-brackets.org/federaltaxtable/1978

Notice the top rate. 70 percent.

That is how much the tax system has skewed to the rich over only 40 some years.

[pangaia]

1. It was higher than that in the 1950's 1960's.

about 91% in 1950s.

[shanny]

13. ...back when we paid for our wars.

[unblock]

2. That top tax bracket for singles is about $390,000 in today's dollars

We have plenty of people making way more than that these days. Shows you how skewed income is

[roamer65]

4. Over 500k definitely should be taxed at 70pct.

[unblock]

5. And over $1 million at 90%

[roamer65]

9. +1000000

[safeinOhio]

11. In 1978 the average car price was about $4,600.

A quarter of what todays cars cost.

[sinkingfeeling]

3. Remember them well. Had my son in 1970 and there

was no child tax credits and limited deductions for child care.

[jaceaf]

6. tax bracket

Honest question. How do you account for places like CA, where six figures is very middle class. Does that make sense? How do you fairly address the burden of living in these high priced cities?

[FoxNewsSucks]

7. Maybe you should ask the tRump admin,

since the tax scam they passed specifically punished states like California.

[TexasBushwhacker]

8. If state income taxes and property taxes are fully deductable

It makes a big difference. You're taxed on your net income, not gross. By putting a cap on SALT deductions, residents of high tax states like New York and California really got screwed over. No surprise that those are both blue states and the GOP was happy to screw them over. Of course, several formerly Republican congressional districts in California flipped to the Democrats because of it, so it ended up costing the GOP. Now that the House is controlled by the Dems, hopefully SALT taxes can be more fully deductible again.

FWIW, the Social Security cap for 2019 is $132900, so for gross income beyond that, you're paying 6.2% less tax. It flattens things a bit. Higher income folks also have the cash to contribute to retirement accounts and postpone those income taxes. That's something a lower income person doesn't have the luxury of doing. Higher income folks are also more likely to have significant investment income which is taxed at a much lower rate.

[roamer65]

10. Inflation adjust the brackets.

$100k in 1965 dollars is now around $1M.

Simply add a zero to the bravket levels from 1965. 1965 brackets are about the same as 1978.

[JHB]

18. 8 times is closer to the mark for 1965, but 10x is decent shorthand

10x is a better fit for the 50s.

[krispos42]

15. Part of the reason it costs so much of housing...

...which is, in large part, driven by investment real estate. Rich people distorting the market with their loads of investment money buying multiple properties to rent out or whatever.

Preventing these investment dollars from entering the real estate market will lower real estate costs.

[sarah FAILIN]

12. The bottom tax rate was 14%

That seems pretty harsh

[Mariana]

14. After exemptions and deductions.

Some income wasn't taxable, just like today.

[JHB]

17. 14% on taxable income, after personal and family exemptions, etc.

In the 50s the lowest bracket was 20%, but again, not all income was taxable. Exemptions removed a big chunk of the earnings of poor and working class families from that category.

[JHB]

16. Complimentary to that, notice where those brackets lay...

The chart below shows the distributions of tax brackets -- the level of taxable income where one rate bracket stopped and the next started -- for 1942-2013, adjusted to 2013 dollars. (Married couple filing jointly.)




The trend of the brackets compressing downward before 1980 was due to inflation; it wasn't until the 80s that automatic adjusting for inflation was added too the income tax code.

You'll notice that the top brackets used to reach much higher than they do now. Taking "good ol'1955" as an example, there were 24 brackets: 16 of them kicked in at levels above the equivalent of $250,000; 11 of those kicked in above $500,000. The top rate of 91% affected income over the equivalent of ~$3.3 million.

But hey, by today's standards, Ike and JFK were obviously a couple of commies.