Now, how could the Count pass up a chance to talk about that most numerically significant time of year, Tax Time!? With lots of talk about rising tax rates and socialism this year, I thought it might be fun and informative to take a look at tax tables from previous years and compare them to recent times.
Using a spreadsheet I found on the internet , I created a table of tax burdens by year for different income levels. While the tax brackets have seen highs in the 90s percent in the post-war 40s and 50s, and started with lows of 1-7% in the early 1910s, I figured 1970 was a good starting point for modern relevancy. I further pared this information down to just the years after fairly significant changes to the tax codes, as many of the annual lines were very similar. I also chose to use the Married Filing Singly tax table, as it was most often the same as Single, and almost always half the income amounts of Married Filing Jointly for the same tax. Here’s is the resulting data:
- The percentage tax burden isn’t the tax “bracket”, it’s the total amount paid in taxes if your income was at the displayed level. Of course, tax shelters exist, but this is based on “taxable income”, the number you use when you look up how much tax you owe.
- Quite obviously, the 1970s were not a good time to be making money. Yes, home interest rates were in the teens, so anyone who owned a home had quite a nice write-off in the interest they were paying, but good Lord, that’s some high taxes!
- 1988 was a good year to make a lot of money, where people making $100k actually paid a (slightly) higher percentage of their income in taxes than those making 3 or even 5 times as much!
Finally, I notice that only at 1993 do we see a marked rise in taxes, and only for those making $100k or more; it seems that taxes have done nothing but drop since 1970 except for that one year. Of course, things like the Alternative Minimum Tax and changes to Capital Gains taxes change the landscape, making it very difficult to get a clear picture of true tax liabilities.
This is quite interesting! People are never happy paying taxes, but I think it’s refreshing to see we’ve got it quite lucky nowadays compared to our parents, tax-wise. Now, if only we could get that money spent just the way we want it, no? But that’s another topic. I sense a post about unusual budget items! Look for it in the future; right now, I’ve got to go file my taxes.
Interested in the data I compiled for the above chart? Here it is: