The way it was

The Tax Foundation (a nonpartisan tax research group based in Washington, DC) has posted a list of all income tax rates and brackets since the beginning of the modern income tax in 1913. The lowest tax bracket in 1913 covered taxable income from zero to $20,000. The top tax bracket of 7% covered all income above $500,000. Adjusted for inflation, that 1% bracket would cover taxable income from zero to $453,292 in 2012 dollars. The top tax bracket of 7% would cover all income above $11,332,304 (in 2012 dollars). There was no differentiation between married, single, head of household, etc. There was only one set of rates and brackets. By 1918 the top rate had skyrocketed to 77% for income above $1,000,000 ($14,859,578 adjusted for inflation). The lowest rate had jumped from 1% to 6%, and it was good only up to $4,000 of taxable income ($59,438 in 2012 dollars). Above $4,000 the rate doubled to 12%. No doubt World War One was to blame for the big jump in taxes. The rates went down in the 1920's, but back up beginning in 1932. (Higher taxes probably did not help the economy recover from the Depression.) By 1936 the top rate was up to 79%, but the lowest rate of 4% covered a bracket that, adjusted for inflation, went up to $64,570. Taxes went sky-high in World War Two, with a top bracket of 94% and a low bracket of 23% that went from zero to only $2,000 (which would be $24,931 today). Tax rates declined only slightly in the 1950s, and then a little more in the 1960s. However in 1964 the top of the bottom bracket went down to only $1,000 ($7,238 in 2012 dollars). The other brackets also became similarly squashed in ensuing years. The rates themselves stayed about the same through the 1970's. Tax rates began declining in the early 1980's.