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1. I think tax brackets are adjusted for inflation: https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adj

1. I think tax brackets are adjusted for inflation: https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets https://taxfoundation.org/us-federal-individual-income-tax-r... 2. The fed funds rate is low, but has been rising: https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate.

zackmorris 8y ago
Hey cool thanks. I think the tax bracket page may only work in Edge, which I don't have on my computer, but I found this image associated with it: https://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg https://commons.wikimedia.org/wiki/File:Historical_Marginal_... I'm having trouble understanding what it's saying though. All I see is that the top bracket was highest during WWI and WWII, approaching 90% on the wealthy, but is effectively zero since Reagan. The low rate's pretty flat and the high rate has gone down. And there are fewer brackets today (that might be why I perceived them as not having been updated). One takeaway though is that the last time tax brackets were similar to today was from 1925-1931... Also if you try clicking MAX on the second link, it seems that we've hit a floor on the fed funds rate, so maybe if it rises then it could move our economy back towards production instead of consumption by making capital more expensive. I might be reading my own gut feelings into that though so take it with a grain of salt.
- hyperpape 8y ago
  1. Sorry, I gave you the wrong link. Here's the info in a PDF: https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r.... 2. We certainly have historically low rates. It's not the case that the Fed has refused to raise them--they've cautiously raised them. One contributing factor is that wages haven't been increasing, and inflation is very very low. The early 80s were an outlier in another way: Paul Volker shot interest rates incredibly high to deal with historically high inflation numbers. So the relevant comparison is arguably 4-10% (late 80s/90s/2000s) vs. 2.25% today.

zackmorris 8y ago

Hey cool thanks. I think the tax bracket page may only work in Edge, which I don't have on my computer, but I found this image associated with it: https://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg https://commons.wikimedia.org/wiki/File:Historical_Marginal_... I'm having trouble understanding what it's saying though. All I see is that the top bracket was highest during WWI and WWII, approaching 90% on the wealthy, but is effectively zero since Reagan. The low rate's pretty flat and the high rate has gone down. And there are fewer brackets today (that might be why I perceived them as not having been updated). One takeaway though is that the last time tax brackets were similar to today was from 1925-1931... Also if you try clicking MAX on the second link, it seems that we've hit a floor on the fed funds rate, so maybe if it rises then it could move our economy back towards production instead of consumption by making capital more expensive. I might be reading my own gut feelings into that though so take it with a grain of salt.

hyperpape 8y ago
1. Sorry, I gave you the wrong link. Here's the info in a PDF: https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r.... 2. We certainly have historically low rates. It's not the case that the Fed has refused to raise them--they've cautiously raised them. One contributing factor is that wages haven't been increasing, and inflation is very very low. The early 80s were an outlier in another way: Paul Volker shot interest rates incredibly high to deal with historically high inflation numbers. So the relevant comparison is arguably 4-10% (late 80s/90s/2000s) vs. 2.25% today.