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A History of US Tax Rates Thumbnail

A History of US Tax Rates

Where do tax rates stand now relative to history?  The US Federal Income Tax was implemented in 1913, so it is 108 years old.  At the time, the higest marginal income tax rate was 7%, and income had to be exceptionally high to hit that bracket.  The highest rate peaked at 94% during World War II and stayed above 90% for about 16 years.  (The California income tax rate was 3% at that time, so a California taxpayer would only get to keep 3% of income over $200,000).  

The highest tax rate was stuck at 70% from 1965-1982. It is currently 37%, and will revert to 39.6% upon the expiration of the Tax Cut and Jobs Act.

Ed Slott has a nice graphic on the progression of the highest marginal tax rate.

A History of U.S. Tax Rates 2023.pdf