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Your numbers don't seem right to me. For people who want more context than this comment provides, please start here: https://www.irs.gov/newsroom/historical-hi
by alecst 5y ago
Your numbers don't seem right to me. For people who want more context than this comment provides, please start here:
https://www.irs.gov/newsroom/historical-highlights-of-the-irs https://www.irs.gov/newsroom/historical-highlights-of-the-ir...
Some highlights:
> 1862 - President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation's first income tax. It levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000.
> 1909 - President Taft recommended Congress propose a constitutional amendment that would give the government the power to tax incomes without apportioning the burden among the states in line with population. Congress also levied a 1 percent tax on net corporate incomes of more than $5,000.
> 1913 - As the threat of war loomed, Wyoming became the 36th and last state needed to ratify the 16th Amendment. The amendment stated, "Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration." Later, Congress adopted a 1 percent tax on net personal income of more than $3,000 with a surtax of 6 percent on incomes of more than $500,000. It also repealed the 1909 corporate income tax. The first Form 1040 was introduced.
> 1918 - The Revenue Act of 1918 raised even greater sums for the World War I effort. It codified all existing tax laws and imposed a progressive income-tax rate structure of up to 77 percent.
Also something many people don't realize is that in the '50s the highest marginal tax rate was 91%, for $4M or more. (The lowest was 20% for $40K or less.) So I don't totally see how your comment relates to the article. You can draw diverse conclusions looking backwards.
- BitwiseFool 5y agoThis is a good catch. I will edit my parent comment accordingly.
- deleted 5y ago[deleted]
- alecst 5y agoWhile I appreciate your perspective, you seem to have cherry-picked a particular instantiation of the income tax to make a point, which I think dovetails with the last sentence in my original post. You can draw lots of conclusions by looking backwards.
- bingohbangoh 5y ago"Also something many people don't realize is that in the '50s the highest marginal tax rate was 91%, for $4M or more. (The lowest was 20% for $40K or less.) So I don't totally see how your comment relates to the article. You can draw diverse conclusions looking backwards. " This gets mentioned frequently and it always bothers me. The tax code was so utterly different back then that you're comparing apples and oranges with it. Consider that the like-for-like transaction qualification was much larger and loopholes (aka deductions) were more common. In practice, nobody paid the 91% rate. If you don't believe me, look up the bipartisan Tax Reform Act of 1986, which lowered the top marginal tax rate from 91%, was revenue neutral. [0] Also note that state & local taxes were very little. New Jersey, which today boasts a very high income tax, did not have one until 1976. [1] New York City did not have one until 1966. [2] Despite this, both states have higher sales taxes than Florida with roughly similar property taxes (though property is much cheaper in Florida). Florida, of course, has no income tax. [0]: https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986 https://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986 [1]: https://en.wikipedia.org/wiki/State_income_tax https://en.wikipedia.org/wiki/State_income_tax [2]: https://en.wikipedia.org/wiki/John_Lindsay#Labor_issues https://en.wikipedia.org/wiki/John_Lindsay#Labor_issues