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Re-activateThere was a fascinating (to us, anyhow) table in a recent issue of the Journal of Financial Planning. It showed the top marginal tax rates for married couples from 1913 through 2003. Those, you'll recall, are the highest rates at which income over a certain amount is taxed.
The rates ranged from a low of 7 percent (on income over $500,000) in 1913 to 94 percent (on income over $200,000) in the war year of 1944.
Top marginal rates stayed in the 80 to 90 percent range until the early 1960s, then dropped into the 70 to 77 percent range. Starting in 1980, rates started down, spending most of the 1990s at 39.6 percent. Since 2003 the top marginal tax rate has been 35 percent.
Lesson here? That tax rates can rise and fall over time and today's relatively low rates may not be with us forever. So, for example, those of us who are still in the workforce can't assume we'll be taxed at a lower rate after we retire.
For some tips on paying less tax this year, click here.
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