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With the President’s proposal to raise taxes on the top income bracket to Clinton-era levels, there’s been plenty of kicking and screaming heard from the right.  Typically, the most specific a politician will get on the subject of taxes is that they’re going either up or down.  But what are the hard numbers behind all the hullabaloo?

Currently, the tax rate on the top income bracket is 35% as a result of George W. Bush’s tax cuts for the wealthiest taxpayers.  Previously, they had held steady at 39.6% during the Clinton years, which is roughly the percentage Barack Obama intends to return the top bracket to. But a look back through the history of taxation in the United States shows that both the Bush and Clinton/Obama rates for the wealthiest Americans are comparatively low by standards set throughout the last century.

During the final year of Ronald Reagan’s Presidency and through all of George Bush Sr.’s administration, top bracket taxes were lower than they are even now In 1988 through 1990 they were set at 28%, then raised by the Elder Bush, who simply found it untenable to run the Federal government with such limited revenue (and who took serious flack for the move after his famous “Read my lips.  No New Taxes.” vow), t0 31% in 1991 & 1992. 

But before these low Reaganomics rates of the late 80’s and early 90’s, taxes were much, much higher for the richest Americans.   Conservative hero Ronald Reagan himself presided over higher top income bracket taxes than Bill Clinton during the majority of his Presidency - 69.5% in 1981, 50% from 1982-1986.  But if you think that’s high, before the “Reagan Revolution” taxes were no joke if you were rich.  Rates between 70% and 94% were standard between 1936 through 1979 and the practice was bipartisan.  Republican  Dwight D. Eisenhower presided over some of the highest tax rates in American history with 91% & 92% rates going toward the top bracket throughout his entire term.  While Richard Nixon raised taxes on the top bracket over those of Lyndon Johnson’s “Great Society“.

What’s also worth noting while looking at the periods of relatively low taxation in the United States is that they are virtually all followed by either recessions or, in the case of Herbert Hoover, the Great Depression.  The Gilded Age of the 1920’s was accompanied by some of the lowest rates on the wealthy in the history of income taxes in the United States.  1925 through 1928, the year of the stock market crash, saw upper bracket rates at a mere 25%.  The Reagan/Bush low tax rates were followed by the recession which swept Bill Clinton into office (”It’s the economy, stupid.”) .  Last but not least, the current economic recession comes on the heels of W.’s tax cuts for the wealthy.  Surely there have been recessions in the past hundred years that did not come on the heels of major tax cuts, however the track record of cutting taxes as a growth program for the economy certainly leaves much to be desired.

You can takepart in getting behind the spin of politicians on the always thorny issue of taxation by checking out FactCheck.org.

LINKS:

CBS News: The income tax system is broken

Baltimore Sun: Happy tax day

CNN Money: Who pays taxes - and how much?