Over the past century what has happened to America’s highest tax rate (top marginal income tax rate)?
Critical Analysis
Find answers to the following questions using the visual above, any links below, your big brain, and your knowledge of American government and politics:
According to the data above, in 1902, what was the top marginal income tax rate (the maximum rate of taxation applied to the highest part of income)?
According to the data above, in 2017, what was the top marginal income tax rate?
Between 1902 and 2017 what was the highest top marginal income tax rate?
Describe the change in top marginal income tax rates over the time between 1902 and 2017.
On February 3, 1913 the 16th Amendment was ratified giving the national government the ability to tax income for the first time. “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” What was the marginal tax rate when the 16th Amendment was ratified in 1913?
The United States declared war on German ally Austria-Hungary on December 7, 1917 and began fighting WWI. What happened to the top marginal income tax rate in 1917?
After the Great Depression began in 1929, the U.S. government under President Franklin Delano Roosevelt embarked upon the New Deal - a series of programs, public work projects, financial reforms, and regulations - between 1933 and 1938. Between December 7, 1941 and September 2, 1945 the U.S. fought WWII. What happened to the top marginal income tax rate during the time period of the New Deal and WWII?
In general, based on the visual above, when does the U.S. increase its top marginal income tax rate?
In 1944-45, the highest tax years in U.S. history, the 94% rate only applied to any income above $200,000 ($3.5 million in 2024 dollars, given inflation). What do you think should be the tax rate for people who make over $3.5 million each year?
In the United States, Article I, Section 8 of the Constitution gives Congress the power to "lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States. Why do you think the Framers gave the power of taxation to the Congress instead of the the President or the Supreme Court?
Write and Discuss
Take ten minutes to write about the question at the top of the page and then discuss with your classmates.
Act on your Learning
The next election will be here sooner than you can imagine. If you are reading this you might just be eligible to vote in the next big election. The people you vote for will determine how much tax you pay. Register to vote now.
Get Creative
If the American top marginal tax rate was a ride at the fair or amusement part, what would it be?
Learning Extension*
Check out these wicked cool charts on how tax rates vary around the world.
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