I would also note that:
* The state, local, and sales taxes were much lower. Today, if the Fed Gov took 91%, the top bracket would have an effective tax rate above 100%.
* This maximum bracket, in your article, was applied to the .01%. That’s billionaires, not millionaires and billionaires, or $250,000 in annual income-aires. Krugman would push very high tax rates down to the 1 or 2% level. The .01% is a much rarer bird.
Not to mention there used to be even more tax shelters and deductions. The 86 tax law really pruned those. Everyone played extensive tax games.
Krugman claimed that the rich paid something like 70% after all was said and done, and I really doubt it.
Don’t forget JFK’s tax cuts and why he did it.
First, the state and local taxes come off the top of the income line, and then the federal taxes kick in on the difference. So, no, it would not take it past 100%.
But the bigger point is that back in the 50s, no one paid a 91% tax rate. That was always a myth. There were so many loopholes and deductions allowed back then that if someone was at the very top, their effective tax rate was probably very similar to what they would pay today on a equivalent income.
The biggest difference between then and today is that the bottom income tax rates have gone to below zero. Today, many actually pay nothing yet get generous refunds for what they didn't pay. That is thanks to the old 'negative income tax' idea that surfaced in the late 60s and Nixon implemented in the early 70s. It was considered an incentive to work back then. Today, its an incentive to keep working at McDonalds.
It took a lot of people out of the game... they get without giving... and it has changed the dynamics profoundly. It's the Santa Claus government. It's not what can I give? It's what can I get?
Krugman is despicable and representation without taxation is criminal.
And let’s not forget the purchasing power of the dollar has eroded such that 2 incomes now doesn’t equal 1 income just after WWII. So taking 91% at the $1+ million bracket left a lot of money the the family bank account.