Help me calculate Nero Wolfe's income

In My Humble Opinion
1

At the beginning of And Be A Villain, Archie is doing Wolfe’s taxes, and says he’ll have to send a check for $4,300 with the return and another $10,000 for the first estimated quarterly payment. So I’m assuming the total tax bill for the year is $44,300.

Below is the tax table for 1948, the year the book appeared. (Note the amazingly high nominal tax rates that were in place back then.) The same rates applied to all categories: Single, Married, etc. But I have no idea how to apply these rates to get to the appropriate income level.

Archie says he’s filing a Schedule C for the business, but of course we have no idea what kind of business expenses Wolfe had to offset his income, and no real way to figure his AGI. So let’s make this easy on ourselves.

What level of adjusted gross income in 1948 would result in a $44,300 tax bill?

% rate Over But Not Over
20.0% $0 $2,000
22.0% $2,000 $4,000
26.0% $4,000 $6,000
30.0% $6,000 $8,000
34.0% $8,000 $10,000
38.0% $10,000 $12,000
43.0% $12,000 $14,000
47.0% $14,000 $16,000
50.0% $16,000 $18,000
53.0% $18,000 $20,000
56.0% $20,000 $22,000
59.0% $22,000 $26,000
62.0% $26,000 $32,000
65.0% $32,000 $38,000
69.0% $38,000 $44,000
72.0% $44,000 $50,000
75.0% $50,000 $60,000
78.0% $60,000 $70,000
81.0% $70,000 $80,000
84.0% $80,000 $90,000
87.0% $90,000 $100,000
89.0% $100,000 $150,000
90.0% $150,000 $200,000
91.0% $200,000

2

I get $72,691.

The tax is calculated as
$2000 at 20% ($400)
$2000 at 22% ($440)
$2000 at 26% ($520)
$2000 at 30% ($600)
$2000 at 34% ($680)
$2000 at 38% ($760)
$2000 at 43% ($860)
$2000 at 47% ($940)
$2000 at 50% ($1000)
$2000 at 53% ($1060)
$2000 at 56% ($1120)
$4000 at 59% ($2360)
$6000 at 62% ($3720)
$6000 at 65% ($3900)
$6000 at 69% ($4140)
$6000 at 72% ($4320)
$10000 at 75% ($7500)
$10000 at 78% ($7800)
$2691 at 81% ($2179)

3

So that’s how it was done? The first $2,000 at 20% plus the next $2,000 at 22%, and so on? I had no idea.

4

That home office is a treasure mine of business deductions. You know how Wolfe always insists that his clients and other visitors have eaten before conducting business, even if it’s just Fritz bringing a ham sandwich? Voila! His world class personal chef and pantry stocked with fine and exotic foods is erased from his income. I’m still trying to figure out the orchid angle.

5

A lot of people don’t. You’ll see a lot of people complaining about how their net income went down because they just bumped up into the next tax bracket, even though tax brackets don’t work that way.

6

I tried to convince my wife to have taxes taken out if she wins at the casino. They only give you a 1099 if you cash out more then $1200 in your receipt at the window. The form has a space for federal taxes but they only withhold state taxes. I think they will withhold some federal if you ask. Even 10% would help as the entire winnings gets taxed at whatever my top rate is. Of course I have to pay it next year.

7

Yeah, well - it works that way for long-term capital gains.
There is a taxable income threshold below which there is no long-term capital gains taxed on the sale of a house. Earn 1¢ more than that threshold, and the tax is 15% on the profit.

8

FWIW here’s what that means inflation adjusted. After all those businesses expenses deducted.

$72,691 in 1948 is equivalent in purchasing power to about $958,166.92 today

$583,934.66 equivalent paid in taxes.

9

Those 1948 tax brackets are indeed kind of shocking. Today the highest tax bracket is 37%. 91%?!?!

There’s one for you, nineteen for me.

10

I am not sure he would allow Archie to deduct that. In fact IIRC he specifically told Archie not to expense that.

Yep, before reagan screwed up the tax system, the top rate (on the last dollar) was 70% and neither Social Security nor Unemployment was taxable.

11

Remember they were paying off the war debt. And those high marginal rates discouraged corporations from paying absurd salaries to their executives.