While the first federal income tax was created in 1861, during the Civil War, it was a flat tax and repealed in 1872. Income tax brackets didn’t exist prior to 1913, with the ratification of the 16thamendment and the Passage of the 1913 Revenue Act.
The top individual marginal income tax rate tended to increase over time through the early 1960s, with some additional bumps during war years. The top income tax rate reached above 90% from 1944 through 1963, peaking in 1944, when top taxpayers paid an income tax rate of 94% on their taxable income. Starting in 1964, a period of income tax rate decline began, ending in 1987. From 1987 to the present, the top income tax rate has been fluctuating in the 30% - 40% range.
Note: For much of tax history, the top income tax rate is figured by adding a “surtax” rate to a basic rate.
A historical look at top marginal income tax rate
Year | Regular | SURTAX | TOTAL TOP RATE |
1913–1915 | 1% | 6% | 7% |
1916 | 2% | 13% | 15% |
1917 | 4% | 63% | 67% |
1918–1921 | 8% | 65% | 73% |
1922–1923 | 8% | 50% | 58% |
1924 | 6% | 40% | 46% |
1925–1931 | 5% | 20% | 25% |
1932–1933 | 8% | 55% | 63% |
1934–1935 | 4% | 59% | 63% |
1936–1940 | 4% | 75% | 79% |
1941 | 4% | 77% | 81% |
1942–1943 | 6% | 82% | 88% |
1944 | 3% | 91% | 94% |
1945–1963 | 3% | 88% | 91% |
1964 | 3% | 74% | 77% |
1965–1981 | 70% | 70% | |
1982–1986 | 50% | 50% | |
1987 | 38.5% | 38.5% | |
1988–90* | 33% | 33% | |
1991–1992 | 31% | 31% | |
1993–2000 | 39.6% | 39.6% | |
2001 | 39.1% | 39.1% | |
2002 | 38.6% | 38.6% | |
2003–2012 | 35% | 35% | |
2013–2017 | 39.6% | 39.6% | |
2018-2022 | 37% | 37% |
*During 1988–90, tax on top income could not be determined without using a worksheet, but 33% appears to have been the highest rate paid.
Source: Wolters Kluwer CCH® AnswerConnect, 2022
Permission for use granted.
