U.S. Income Tax Rate History

Feb 17, 2012 by

Trust me, the last topic I want this blog to be about is U.S. politics, so believe me when I say this is not a political post. Rather it’s a request for critique of an analysis I did for my own interest on historical U.S. tax rates.

The Project

I set out to track for the 51 years 1961-2011 the effective federal income tax rate for a single individual with $200,000 of taxable income (that is, $200,000 left after all deductions, credits, adjustments, etc).

I collected tax rate data here: Tax Foundation data

Because I used nominal tax rates, I adjusted the $200,000 taxable income using the GDP Deflator. I used the Deflator data found here: MeasuringWorth.com.

The $200,000 in taxable income is in 2005 dollars, because the GDP Deflator index = 100 in 2005. I adjusted the $200,000 for each of the other 50 years, using the GDP Deflator index. For example: Expressed in 1961 dollars, $200,000 = $37,260. The effective tax rate I plotted below for 1961 is the rate on $37,260 of taxable income.


Is this analysis valid? Please ask questions if you need to know more about my methodology to make a judgement. You can use the Comments section below or send a note through the Free Advice link at the top of every page.

  • Good to see that the income is adjusted for inflation. Was there a reason for using the GDP deflator as opposed to CPI? They do seem comparable over the long run. I don’t know if past available tax deductions would have altered the “true” effective tax rate by altering taxable income.

    • mymoneycounselor

      Thanks Jonathan. No reason really. I just chose the GDP Deflator more or less arbitrarily as a measure of wage inflation. Whether the CPI might be more appropriate for this analysis, I don’t know.

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