The Most Important Economic Chart
If you must know only one fact about the U.S. economy, it should be this chart:
The chart shows that productivity, or output per hour of work, has quadrupled since 1947 in the United States. This is a spectacular achievement by an advanced economy.
The gains in productivity were quite widely shared from 1947 to 1980. Real income for the median U.S. family doubled during this time just as output per hour of work performed doubled. The rising tide was lifting all boats.
However, what we want to focus on today is the remarkable separation in productivity and median real income since 1980. While the United States is producing twice as much per hour of work today compared to 1980, a small part of the gain in real income has gone to the bottom half of the income distribution. The gap between productivity and median real income is at an historic all-time high today.
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http://houseofdebt.org/2014/03/18/the-most-important-economic-chart.html
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...and has not been restored to anything approaching historical levels.
Even leaving aside the actual tax rates as a separate issue, progressivity in the income tax code has been pushed downward, to the point that all bracket divisions occur below $500,000, and only 2 affect income in excess of $250,000. In contrast, in 1955 two thirds of brackets (16 of 24) kicked in at levels above the equivalent of $250K, and nearly half (11 of 24) affected incomes above the equivalent of $500K.
Note: the tax brackets weren't indexed to inflation before 1984. That's why they generally slope downward prior to that time (i.e., it's how inflation shows up when shown in terms of 2013 dollars), and relatively flat afterward.
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