US Federal Tax History

In 1789, federal tax was collected by taxing imports to pay for the Revolutionary war, fund government operations and encourage US industries to develop. In the 1860’s an income tax was imposed to pay for the Civil War. But income from Federal land sales was added to the US Federal coffers. 

The current US tax policy was adopted in 1913 with a top marginal tax of 7% on individual income. In 1916 it was raised to 15%. In 1917 it was raised to 67% to pay for World War I.

Year Tax%

1913  7%

1916 15%

1917 67%  WWI

1918 77%

1919 73%

1922 58%

1923 25% Roaring 20’s

1932 63%

1936 79%

1940 81%

1942 88%

1944 94%

1946 86.5%

1948 82%

1950 84%

1951 91%

1952 92%

1954 91%

1964 77% Kennedy

1965 70% Vietnam

1968 75% Johnson

1969 77%

1970 71.7%

1971 70%

1981 69%

1982 50%

1987 38.5 Reagan

1988 28%

1991 31% Bush I

1993 39.6% Clinton

2003 35% Bush 2

2013 39.6% Obama

2018 37% Trump

https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates

Comments

The 71% top tax rate in the 1970’s applied to all taxable income above $100.000. The 39.6% top rate in 2013 applied to all taxable income above $400,000.

https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf

Norb Leahy, Dunwoody GA Tea Party Leader