Monday, April 18, 2011

Interesting Tax Chart

Top bracket income tax and corporate tax from the beginning of income tax in 1913.

An exercise in “how to lie with statistics”.

When people say that taxes were higher under Reagan than they were under Clinton, they are right. What they’re wrong about is that Clinton had anything to do with that other than keeping them approximately as low as Reagan slashed them (from something like 68% to something near 25%.) One big drop in his first term, and another big one in his second.

So when people say “Taxes were low under Clinton” they are technically correct but their ultimate point is false. The economy under Clinton benefited from the huge Reagan tax cuts. G.H.W. Bush raised them a little bit, then Clinton raised them a little bit more, but neither brought them back up to anything like they were before Reagan took office. Note that G.W. Bush lowered them a tiny scoche.
It’s still true that the top 1% pays 38% of the taxes. Which should end all discussion of “paying their fair share”.

Note the other big tax cut under Kennedy in the 1960’s. I wish there were lines for the middle and low income brackets

-- Ah, here we go!  Data from the same site.

Note that bump about 1988.  Tax rate on the lowest income bracket went up a little, but at the same time the taxation threshold went from people making $3,000 to people making $28,750.  There are similar notable anomalies ... when the top bracket tax rate went from 25% to 63% in 1932, the income needed to be in that bracket went from $100K to $1M.  Over the next several years they bumped up the top rate to 81% but they bumped the income needed to $5M.  But in 1941 they dropped that income level to $200K and proceeded to crank up the top rate over the next few years to 94% by 1945.   So if you made $200K (taxable), you got to keep less than $20K.  Wow.

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