1954 v 2012 Tax Schedules

The fiscal conservatives and Tea Party-ites sure do a lot of complaining about paying more taxes... To them its unfair and even more so-- Un American!

And they will spout a lot of empty rhetoric about personal freedom, individual initiative and other catch phrases that sound good..  And they will pine about the good ole' days.. When Government was smaller and there was less regulations.. and when it was safe to walk out at night and go to sleep with the doors unlocked and all that..

So, were they right?  Not about the locked door at night part.. but that taxes were fairer and overall lower back in the good ole' day then it is now?

Let's see-- we'll use 1954 as a good example.  Eisenhower, a Republican was President.. and certainly he must have abhorred taxes like the Tea Party rabble, yes?  'Ike' was no wealth-redistribution Commie...

Here's an itemized 1954 Tax Schedule which we researched.  The first column would be the amount of salary for those who worked back then.. the second column is the tax rate that workers were expected to pay, and the last column represents what that 1954 salary would be equivalent to in 2008 so to give modern perspective...

Income level                   Tax rate   2008 PPC Adjusted Income
up to $2,000.00                    20% up to $37,500.00
$2,000.01 – $4,000.00         22% $37,500 – 75,000
$4,000.01 – $6,000.00         26% $75,000 – 112,500
$6,000.01 – $8,000.00         30% $112,500 – 150,000
$8,000.01 – $10,000.00       34% $150,000 – 187,500
$10,000.01 – $12,000.00 38% $187,500 – 225,000
$12,000.01 – $14,000.00 43% $225,000 – 262,500
$14,000.01 – $16,000.00 47% $262,500 – 300,000
$16,000.01 – $18,000.00 50% $300,000 – 337,500
$18,000.01 – $20,000.00 53% $337,500 – 375,000
$20,000.01 – $22,000.00 56% $375,000 – 412,500
$22,000.01 – $26,000.00 59% $412,500 – 487,500

Continued...

Income level                       Tax rate  2008 PPC Adjusted Income
$26,000.01 – $32,000.00 62% $487,500 – 600,000
$32,000.01 – $38,000.00 65%      $600,000 – 712,500
$38,000.01 – $44,000.00 69% $712,500 – 825,000
$44,000.01 – $50,000.00 72% $825,000 – 937,500
$50,000.01 – $60,000.00 75% $937,500 – 1,125,000
$60,000.01 – $70,000.00 78% $1,125,000 – 1,312,500
$70,000.01 – $80,000.00 81% $1,312,500 – 1,500,000
$80,000.01 – $90,000.00 84% $1,500,000 – $1,687,500
$90,000.01 – $100,000.00 87% $1,687,500 – $1,875,000
$100,000.01 – $150,000.00 89% $1,875,000 – $2,812,500
$150,000.01 – $ 200,000.00 90% $2,812,500 – $3,750,000
$200,000.01 or more             91% $3,750,000 or more

That is NO exaggeration or typo... Back in 1954, under a Republican President who would serve two terms, the highest tax rate was Ninety-One Percent, and it was paid by those making the equivalent of $3.75 Million and UP

And overall the economy thrived!

Here's the 2012 Tax Schedule:

    10% on taxable income from $0 to $8,700
    15% on taxable income over $8,700 to $35,350
    25% on taxable income over $35,350 to $85,650
    28% on taxable income over $85,650 to $178,650
    33% on taxable income over $178,650 to $388,350
    35% on taxable income over $388,350.

The tax rates for 2013 are scheduled to change as follows: the 10% rate will be collapsed into the 15% rate; the 25% rate will become 28%; the 28% rate will become 31%; the 33% rate will become 36%; and the 35% rate will become 39.6%. These tax rate changes will take effect beginning in 2013 absent further legislation.

Let's say you earned $175k/yr, lets compare your income taxes today vs what you would have paid 58 years ago:

$175,000 x .28 = $49,840 in taxes (2012 rate)

$175,000 x .34 = $59,500 in taxes (1954 rate)

So a person making $175k pays a little under $10k less in taxes today than he/she would have, when adjusting salary back n 1954.

Now let's say you're a multi-millionaire athlete or celebrity and you make $7 million/year... what is the tax differential?

$7,000,000 x .35 = $2.45M paid in taxes (2012 rate)

$7,000,000 x .91 = $6.37M paid in taxes (1954 rate)

Now in 2013, the tax rate is supposed to rise to 39.6% from 35%..  If one puts things into proper perspective, its clear that a 4% raise is really no big deal when compared to historical tax tables.  Its only a big deal without any other frame of reference but paying more in '13 vs '12.

And out of curiosity, what was the unemployment rate in 1954?  Certainly it had to be enormous right?  All those high taxes-- no way corporations could thrive yes?

For the 1954 calendar year, the highest rate was 6.1% in September and 12 months later, in September 1955, it dropped to 4.1%.   And for most of Eisenhower's two terms, the unemployment rate remained generally in the 4-5% range which is normal in a healthy economy.

So all those people who Bitch and Complain about how unfair it is they have to pay more in taxes and how its going to destroy the 'precious' stock market, the economy, and other such nonsense, examine this 1954 Tax Schedule, compare your bracket to what you are paying today...

 And then simply Shushh Up and be grateful.