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Tuesday, 18th October 2011

Income Tax Paid at Each Tax Rate, 1958-2009

Source: Urban Institute, Brookings Institution

From the publication web page:

The federal individual income tax has had many more brackets and much higher rates in the past than it does today. In 1958, for example, there were 24 brackets (versus 6 today) and the top rate was 91 percent (versus 35 percent today). The impact of more brackets and higher rates on taxpayers and revenues depends on how much taxable income falls in each of the tax rate brackets. We find that only a small fraction of returns was subject to rates above today’s top rate of 35 percent in any year since 1958, but a significant fraction of tax was paid at these higher rates in many years. For example, prior to 1982 (when the top rate was reduced to 50 percent), taxable income in brackets above today’s top 35 percent rate was taxed at an average effective rate of 49 percent. We estimate that increasing the effective tax rate on taxable income in the 35 percent bracket to 49 percent would have raised $78 billion of additional income tax revenue in 2007.

+ Link to full report (PDF; 418 KB)


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Peggy Garvin, of Garvin Information Consulting, is the author of United States Government Internet Directory (Bernan Press) and Real World Research Skills, 2009 (TheCapitol.Net). In her 20 years in the information business, Peggy has managed electronic information products and services in a variety of environments, including commercial publishing, e-commerce, law firms, and the Congressional Research Service of the Library of Congress. Peggy's work has been recognized with the 2011 SLA Dow Jones Leadership Award. She has a Masters of Library Science degree from Syracuse University School of Information Studies.

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