78 • RUBY, WILDING & SWANSBURG
It tracks the top feder al tax r ate throughout hist ory, usually fro m the early 1900s through today. It’s an encour aging char t. It shows that—historicall y speaking—the top marginal tax rate today is much lower than at other times in history, like the start of the Roaring Twenties or fol low ing W orl d W a r II. Looking at this chart, you might think, “Hey, th ings aren’t so ba d today.” But, you’d be mistaken. The proble m with top marginal tax rates is that not many people pay them. Yes, in the 1950s, top rates were near 90 per cent. But that 91 per cent br acket in 1950 was only applied to households with income over $200,000—which is abo ut $2 million of annual income today. 31 Very few peopl e in 1950 w ere paying that rate. So, it’ s not a great barometer of the overall tax environment. That’s why I like to analyze a different measure— one that more closely aligns with what Americans may pay in taxes. That’s the middle quintile. 31 Erica York. Tax Foundation. January 31, 2019. “Income Taxes on the T op 0. 1 Percent Weren’t Muc h Higher i n the 1950s.” https://taxfoundation.org/income- taxes-on-the-rich-1950s-not-high
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