The IRS has made changes to the tax bracket -- here's what it will mean for you
Earlier this week, the IRS announced the 2021 tax year annual inflation adjustments for more than 60 tax previsions. Those include tax rate schedules and other tax changes.
Everyone who pays taxes is grouped into seven brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The changes have been made to keep pace with cost-of-living adjustments.
https://www.news4jax.com/features/2020/10/28/the-irs-has-made-changes-to-the-tax-bracket-heres-what-it-will-mean-for-you/
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For instance, in 1955 there were 24 brackets. Adjusting to 2013 dollars (because that was when I ran the numbers), 16 of those kicked in at taxable income above the equivalent of $250,000. Eleven of those kicked in above the equivalent of $half million.
The top bracket, with the 91% rate, was on taxable income above the equivalent of about $3.5 million.
This was the bracket distribution between 1942 and 2013:
Below is the historical number of brackets. Note that before 1980 there used to be a lot more:
Remember, when someone complains about the complexity of the tax code and then proposes to "simplify" by reducing the number of brackets, they're lying and trying to cover up big breaks for upper incomes. All the complicated stuff comes earlier: deductions, depreciations, different income types, etc. Once you have a number for taxable income, applying the brackets is just straight math. Before WW2 they handled as many as 56 brackets, so don't tell me that it's too complicated for us, with our computers and other gadgets. These days we can make tee shirts with enough computing power to handle it.
