> The top tax rate in the US, decades ago, was 90%.
Which pretty much no one paid because there were so many exceptions to it. Starting with the fact that the top long-term capital gains tax rate was 25%, not 90%.
A lot of those exceptions got eliminated as part of the process of reducing the top marginal rate to the levels we observe now. The current "top" Federal rate is 39.35% on earned income, 40.8% on interest, non-qualified dividends, and short-term capital gains, and 23.8% on qualified dividends and long-term capital gains. That assumes a large enough income that we're not worrying about Social Security in any way, or phaseouts of various sorts or whatnot, but _are_ hitting the extra medicare tax and net investment tax provisions of the ACA. It also assumes that the employer side of the 1.45% Medicare tax is not incident on the employee, which of course it is, but we're comparing "headline" rates.
So specifically for Jeff Bezos, most of whose "income" is presumably long-term capital gains due to AMZN price appreciation, the difference between the "decades ago" utopia you describe and now is the difference between a 25% and 23.8% marginal rate on that long-term capital gain income.
All that said, are you paying a 28% _marginal_ rate, or a 28% _effective_ rate? And are you specifically talking about "wealthy" people or "high-income" people? I ask because last I checked the top 1% of incomes paid something on the order of 25% _average_ Federal tax rate for the last several years (i.e. after the tax cuts a few years ago), and the top 0.1% of incomes paid closer to 27-28%. That's just counting income and payroll taxes, not the incidence of corporate income taxes or whatnot. And again, just Federal; state taxes are a separate story.
I haven't researched this at all, so perhaps these type of studies are out there, but I think it would be interesting to see how exemptions/credits and deductions were actually utilized over time. We have roughly 200B tax returns filed since the income tax was created (not counting corporate returns).
It would be good to be able to visualize how tax collections changed over time etc.
https://www.cbo.gov/publication/57061 and similar for other years (this is data through 2018, but published this year, presumably after they are pretty sure that various delayed tax return filing has happened and whatnot).
This only goes back to 1979, though. If you find something with data older than that I would be interested.
Of interest in the document I linked to is "Exhibit 11. Average Federal Tax Rates, by Income Group, 1979 to 2018" and "Exhibit 12. Average Federal Tax Rates Among Households in the Top 1 Percent, 1979 to 2018", with the latter showing top 0.1% and top 0.01% average tax rates. https://www.cbo.gov/publication/57061#data has links to various xls and csv files, including the data tables those graphs are generated from. Note that per "Appendix C" of this document, the tax rates in these graphs include some sort of individualized attribution of corporate income tax incidence and that attribution could easily be quibbled with. The more detailed data tables include more breakdowns into what fraction of tax is attributed to this source, but I didn't find it more finer grained than "top 1%".
Which pretty much no one paid because there were so many exceptions to it. Starting with the fact that the top long-term capital gains tax rate was 25%, not 90%.
A lot of those exceptions got eliminated as part of the process of reducing the top marginal rate to the levels we observe now. The current "top" Federal rate is 39.35% on earned income, 40.8% on interest, non-qualified dividends, and short-term capital gains, and 23.8% on qualified dividends and long-term capital gains. That assumes a large enough income that we're not worrying about Social Security in any way, or phaseouts of various sorts or whatnot, but _are_ hitting the extra medicare tax and net investment tax provisions of the ACA. It also assumes that the employer side of the 1.45% Medicare tax is not incident on the employee, which of course it is, but we're comparing "headline" rates.
So specifically for Jeff Bezos, most of whose "income" is presumably long-term capital gains due to AMZN price appreciation, the difference between the "decades ago" utopia you describe and now is the difference between a 25% and 23.8% marginal rate on that long-term capital gain income.
All that said, are you paying a 28% _marginal_ rate, or a 28% _effective_ rate? And are you specifically talking about "wealthy" people or "high-income" people? I ask because last I checked the top 1% of incomes paid something on the order of 25% _average_ Federal tax rate for the last several years (i.e. after the tax cuts a few years ago), and the top 0.1% of incomes paid closer to 27-28%. That's just counting income and payroll taxes, not the incidence of corporate income taxes or whatnot. And again, just Federal; state taxes are a separate story.