https://fred.stlouisfed.org/series/FYFRGDA188S/P>
Posted on 12/15/2022 1:00:32 PM PST by amorphous
It’s real. Reagan lowered it down from the top rate of 90’s to 70 ish.
It’s real, but you have to remember there were tons of exemptions, write offs and loopholes back then. It was crazy. Accountants were critical if you made any real money.
Kennedy brought it down to 70. Reagan went to 50, then 28.
That was JFK/LBJ. Reagan cut from 70 to 50, the 50 to 28 and reformed the tax code.
It’s amazing that a few decades earlier, it was zero.
I know what it was in 1912...
I seem to remember learning in High School that a
1040 could be filed using a postcard.
Yes it was long long ago in a galaxy far away.
It’s real. Reagan lowered it down from the top rate of 90’s to 70 ish.
I want to correct myself. Reagan lowered it from 73% to 28%
We were still paying for World War II. World War II devoured 45% of the GDP in 1943. The Nazis never put their economy on as much of a wartime footing as the Americans in 1943.
At a 92% tax rate people were investing in anything you could deduct. If the investment paid anything you were ahead. The deal was fewer deductions for lower rates. Of course we all new that eventually meant no deductions and higher rates again.
I remember those days. I also remember the idea was to pay off the debt from World War II and the Korean War. It did not work out that way as people making real money, for example, physicians simply stopped working and took long vacations to avoid paying the confiscatory taxes. After all, who wanted to earn 91 cents for Uncle Sam and only 9 cents for himself for every dollar over $200,000.00 he earned.
Ray Stevens has a song about taxes: https://www.youtube.com/watch?v=LVyn6mT5RQ8
Notice Ray made this song after taxes were lowered but again going upwards.
yes, you arre right. You could deduct credit card interest for example.
https://fred.stlouisfed.org/series/FYFRGDA188S/P>
Exactly.
I remember my father was able to deduct a certain percentage of his income from state sales tax. It was a formula based on the percent in your state.
Also slightly before I graduated college they had adjusted average income. So new employees who made decent money got to average it against previous years when they made little. It got taken away if your filing status had been “student.” the year(s) before.
Lots and lots more that have been eliminated.
$2000/year was a decent wage back then. A house was easily well under $10,000. Being a “millionaire” was incredibly rare.
Loopholes abounded, IIRC. Bottom line, few people ever paid those high rates. Eliminating the high rates made the loopholes insignificant, and everyone more inclined to integrity.
Until President Kennedy lowered it it was 90%.
John Wayne had to make movies like crazy as he was in the top bracket and had alimony and such.
Elmer Fund Millionaire
I own a mansion and a yacht
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