STOCK MARKET WATCH -- Tuesday, 26 February 2013

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9. Happy Birthday, Dear Income Tax

http://www.commondreams.org/view/2013/02/26-3



In February 1913, exactly a century ago, the Sixteenth Amendment gave Congress a constitutional green light to levy a federal tax on income. Later that same year, lawmakers made good on that opportunity. An income tax has been part of the federal tax code ever since.


So what can we learn, as progressives, from this first century of income taxation?

Lesson One

Steeply graduated income tax rates can help societies do big things.

A half-century ago, America’s federal income tax rates rose steadily—and quite steeply—by income level, with 24 tax brackets in all. On income roughly between $32,000 and $64,000, in today’s dollars, couples in the 1950s faced a 22 percent tax rate. On income that today would equal between $500,000 and $600,000, affluent Americans faced a tax rate of 65 percent. The highest 1950s tax rate, 91 percent, fell on annual income that would today exceed $3.2 million.