Total Taxes Paid by Americans

[aahala]

@flurb

Somewhat off topic, but it floored me when I first learned that the top tax bracket before Reagan was 70% (having previously been reduced from 91% (!) during the Kennedy Administration). My question is, did anyone every really pay that much in tax? I can’t imagine what incentive anyone would have had to put in the effort to earn a salary in the top bracket if they only got pennies on the dollar.

I don’t have a cite but I doubt hardly anyone was paying that top rate. Even back then, there was a distinction between money and income.

Money is what you receive, income is defined by the tax code. You pay taxes on income not money. So one finds ways to make or spend money that isn’t considered income.

[Barbarian]

The obvious flaws in the OP are the social security doubling up, and the sales tax at the grocery store. If you pay 7.5% off your paycheque to SS, and your employer matches that, well, you’re not paying 15% unless you’re self-employed.

As for the ‘top tax rate’, I’ll point out that for the extremely rich most of their earnings come in the form of dividends, on which you pay very different levels of income tax.