• About
  • Mortgage Basics
  • $40K Challenge
  • Aunt Doris
  • Grandfather Says
  • Privacy
  • Archives

Len Penzo dot Com

The offbeat personal finance blog for responsible people.

Top and Bottom US Federal Income Tax Rates Since 1913

By Len Penzo

taxpenaltiesAnd you thought tax rates on regular income were outrageous today. Take a look at how high the top and bottom income tax rates for both were 70 years ago. Yikes!

In 1944 and 1945, taxpayers handed over 94% of their hard-earned income to the federal government on any gains falling within the highest tax bracket. Meanwhile, even the lowest-earning workers at that time were paying a 23% tax on income falling within the bottom bracket. Compare that to 39.6% and 10%, respectively, in 2015.

In 1913, when the income tax was initiated, the top tax rate was just 7% on earnings above $500,000 — that’s $11 million in today’s inflation-adjusted dollars. As for the lowest tax rate, it was just 1%.

Ah, the good ol’ days.

By the way, the $200,000 top income tax tier for 1970 is equivalent to a little more than $1.2 million today, so I guess the government giveth (in the form of lower rates) and taketh away (via a top tax bracket that is more than $10 million lower in inflation-adjusted dollars than it was in 1913).

So, all in all it’s pretty obvious that the federal government taketh a lot more than it giveth away.

For what it’s worth, the capital gains tax rate has moved up and down over the years too.

Photo Credit: John-Morgan

1 Comment March 26, 2015

Comments

  1. 1

    Hugh says

    It’s obvious that the initiation of the income tax is what has allowed Washington DC to expand its power far beyond what is allowed by the Constitution. 1913 was a terrible year for the US because it was the year the Fed and the income tax were both born.

    Reply

Leave a Reply to Hugh Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Question of the Week:

What did you do with your latest COVID stimulus check?

View Results

Loading ... Loading ...

Recent Posts

  • Black Coffee: A Land of Confusion
  • Which Sectors Got a Real Boost in 2020?
  • The Top 10 Ways to Quickly Make $500 in 2021
  • How Home Crowdfunding May Let Millennials Live the American Dream
  • 3 Important Tax Deduction Rules You Should Always Remember
  • 5 Ways You Can Save Money on Groceries This Week
  • Economic Collapse 101: How to Prepare for Water Supply Disruptions
  • Black Coffee: Painting the Town Red
  • 5 Ways the Oil Industry Affects the US Economy
  • An HVAC Professional Teaches High School Students About the Field

Disclaimer

This site is for informational and entertainment purposes only, and the content herein should not be mistaken for professional financial advice. In fact, making investment decisions based on information published here, or any other website for that matter, is more than unwise; it is folly. This website accepts advertising in the form of monetary and other compensation; as such, topics of discussion are occasionally influenced by these advertisers. Sometimes, an article may also include affiliate links, meaning, at no additional cost to you, this blog earns a commission if you click through and make a purchase (for example, as an Amazon Associate I earn from qualifying purchases). Remember, you and you alone are responsible for the decisions you make in life, so please contact an independent financial professional for advice regarding your unique personal situation.

Sign up for the weekly Len Penzo dot Com newsletter
Len Penzo dot Com Delivered Weekly
Join more than 30,000 readers and fans who enjoy personal finance and macroeconomics with an offbeat twist!
Invalid email address
Thanks for subscribing!

Popular Now:

  1. 1. A Simple Test to Know If It’s Better to Rent or Buy a Home
  2. 2. My Cola Taste Test: Is Coke Really Better Than Pepsi?
  3. 3. My 10 Commandments of Personal Finance
  4. 4. The Best Personal Finance Book I’ve Ever Read
  5. 5. Planning a Wedding? Here Are 9 Ways to Ensure You’ll Pay Too Much
  6. 6. 5 Things Nobody Tells You About Being Poor — for Good Reason
  7. 7. 4 Good Reasons Why Some Quarters Are Painted Red
  8. 8. 3 Great Hobbies That Are Investments Too
  9. 9. 10 Red Flags That May Signal You’re In Serious Financial Trouble
  10. 10. Are Gas Clothes Dryers Worth the Extra Money?

All-Time Most Popular:

  1. 1. 19 Things Your Suburban Millionaire Neighbor Won’t Tell You
  2. 2. Dear Friend: Here Are 41 Reasons Why I’m NOT Lending You the Money
  3. 3. Why Your Expensive Luxury Car Doesn’t Impress Smart People
  4. 4. If You Can’t Live on $40,000 Annually It’s Your Own Fault
  5. 5. 21 Reasons Why Corner Lots Are for Suckers
  6. 6. 4 Smart Reasons Why College Isn’t for Everyone
  7. 7. 18 Fast Facts About Social Security Numbers
  8. 8. My Ketchup Taste Test: Upset! Guess Which Brand Topped Heinz
  9. 9. Why I Prefer a Spreadsheet to Track Expenses and Manage My Finances
  10. 10. Here’s a Simple Trick for Getting Credit Card Interest Charges Waived

Copyright © 2021 Len Penzo dot Com · All Rights Reserved · Designed by Nuts and Bolts Media

Copyright © 2021 · Penzo on Genesis Framework · WordPress · Log in