How is it that in 1944 there was a marginal tax rate of 90%?

Question

Am I just not reading this table correctly?

http://www.truthandpolitics.org/top-rates.php

Will someone please explain.

Answer 1

You are reading that 100% correctly. It was lowered during LBJ's time but it wasnt until Reagan that lowered it to 50%. He was the one that said that when he was making movies, that he would only make two per year because if he made a third, 90% of his pay would have gone to the govt. Real productive.... hence our lowering that rate to 35% today.

Answer 2

There was a 90% top rate at one time. It might have been 1944, but continued long after that - I remember it, and wouldn't have in 1944 since I was just a baby. It only affected the highest income group though.

Answer 3

Keep in mind that very few people made over $200,000 in 1944 so the number of people effected by this rate was small and, as it is a marginal tax rate, only the income above $200,000 was taxed at this rate.

Answer 4

The country was at war. The government was grabbing all the revenue it could. Their was patriotic fever and a widespread belief that nobody should be profiting from the war.