The record top marginal tax rate was 94% at the end of World War II. In fact for most of the history of the income tax until Reagan the top rates were 70% or above.
But you have to keep in mind that those top tax rates applied to very few people compared to now.
In 1941, for example, the top marginal rate was 81% but that was only on income above $5,000,000.
In 1945, it went up and was broadened. 94% on income above $200,000.
However, in inflation adjusted dollars, that 1941 would be on income above $69.7 million, I doubt that applied to even a few dozen people at the time. Even the $200,000 adjusts so $2.3 million a year.
By contrast, the current max rate of 35% applies to everything over $357,700*. Still definitely the cream of the crop but hardly the extreme far end of the curve.
Anyway, my point being that everybody likes throwing around the top marginal rate but that is pretty irrelevant without knowing how many people it affects. Obama could outrage Republicans by advocating a 100% marginal rate on incomes over $1.3 trillion.
*All of these numbers are for married filing jointly.
|
