90% Tax Rates

Let me tell you how it will be
That's one for you, nineteen for me
--The Beatles

Interesting review of the infamous 90% top marginal tax rate imposed during the 1950s--something many progressives would like to reinstate today. After accounting for tax deductions and loopholes available during the period, studies suggest the effective top tax rate paid was about 45%--not far from today.

Moreover, few earners actually made it to the top bracket (which actually made it to 91%)--given that there were a mind boggling 24 different tax brackets (there are seven today). Only earners bringing in an inflation adjusted $3.5 million found their way into the 90% bracket.

An important result of the '90%' period is that total tax receipts did not increase. In fact, total receipts have not changed appreciably since 1950.

The author also links to a study that includes a graph of fraction of total taxes paid by group. Analysis indicates that the highest quintile of earners have increased their share of total income taxes paid from 55% in 1980 to nearly 70% today.

Unfortunately, this is unlikely to discourage progressive from wanting to take more.