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Thursday, November 4, 2010

Taxes: Merely Affluent vs. Truly Rich

Most people know that the top income tax rates used to be much higher than they now are. What's much less known is that the top brackets started at much higher income levels than today's top brackets do. In other words, the tax code used to draw sharper distinctions between the merely affluent and the truly rich.
In 1960, the top tax bracket — with a marginal rate of 91 percent — started at $400,000, which is the equivalent of almost $3 million today, as I mentioned in my column this week. These days, the top bracket starts at just a small fraction of $3 million: $373,650.
In 1970, the top bracket started at $1.1 million in today's terms ($200,000 in 1970 dollars). In 1980, the top threshold was $571,000 in today's terms. Since the early 1990s, the cutoff has been roughly where it is now, adjusted for inflation.

From Merely Affluent vs. Truly Rich by David Leonhardt, November 2, 2010 at Exonomix Blog, New York Times.

1 comment:

DaveS said...

Nice to see some real insight on this. It is impossible to listen to the spinners whatever their stripe and get any kind of understanding. It also seems like there should be a difference in inherited or salary wealth and a business owner who risks his own money to make a living. Where to draw the line is the primary question of policy. Unhappily it gets lost in ideology and misinformation.