Table A.—U.S. individual income tax: personal exemptions and lowest and highest bracket tax rates, and tax base for regular tax, tax years 1913-2005
Table A.–U.S. Individual Income Tax: Personal Exemptions and Lowest
and Highest Bracket Tax Rates, and Tax Base for Regular Tax, Tax
Years 1913-2005
[Amounts are in dollars.]Personal exemptions [1]
Tax year
Single Married Dependents
persons couples
(1) (2) (3)
1913 3,000 4,000 N/A
1914 3,000 4,000 N/A
1915 3,000 4,000 N/A
1916 3,000 4,000 N/A
1917 1,000 2,000 200
1918 1,000 2,000 200
1919 1,000 2,000 200
1920 1,000 2,000 200
1921 1,000 [4] 2500 400
1922 1,000 [4] 2500 400
1923 1,000 [4] 2500 400
1924 1,000 2,500 400
1925 1,500 3,500 400
1926 1,500 3,500 400
1927 1,500 3,500 400
1928 1,500 3,500 400
1929 1,500 3,500 400
1930 1,500 3,500 400
1931 1,500 3,500 400
1932 1,000 2,500 400
1933 1,000 2,500 400
1934 1,000 2,500 400
1935 1,000 2,500 400
1936 1,000 2,500 400
1937 1,000 2,500 400
1938 1,000 2,500 400
1939 1,000 2,500 400
1940 800 2,000 400
1941 750 1,500 400
1942 500 1,200 350
1943 500 1,200 350
1944 [11] 500 [11] 1000 [11] 500
1945 [11] 500 [11] 1000 [11] 500
1946 500 1,000 500
1947 500 1,000 500
1948 [14] 600 [14] 1,200 600
1949 [14] 600 [14] 1,200 600
1950 [14] 600 (14] 1,200 600
1951 [14] 600 [14] 1,200 600
1952 [14] 600 [14] 1,200 600
1953 [14] 600 (14] 1,200 600
1954 [14] 600 [14] 1,200 600
1955 [14] 600 [14] 1,200 600
1956 [14] 600 [14] 1,200 600
1957 [14] 600 [14] 1,200 600
1958 [14] 600 [14] 1,200 600
1959 [14] 600 [14] 1,200 600
1960 [14] 600 [14] 1,200 600
1961 [14] 600 [14] 1,200 600
1962 [14] 600 [14] 1,200 600
1963 [14] 600 [14] 1,200 600
1964 [14] 600 [14] 1,200 600
1965 [14] 600 [14] 1,200 600
1966 [14] 600 [14] 1,200 600
1967 [141 600 [14] 1,200 600
1968 [14] 600 [14] 1,200 600
1969 [14] 600 [14] 1,200 600
1970 [14] 625 [14] 1,250 625
1971 [14] 675 [14] 1,350 675
1972 [14] 750 [14] 1,500 750
1973 [14] 750 [14] 1,500 750
1974 [14] 750 [14] 1,500 750
1975 [14,26] 750 [14,26] 1,500 [26] 750
1976 [14,27] 750 [14.27] 1,500 [27] 750
1977 [14,27] 750 [14,27] 1,500 [27] 750
1978 [14,27] 750 [14,27] 1,500 [27] 750
1979 [14] 1,000 [14] 2,000 1,000
1980 [14] 1,000 [14] 2,000 1,000
1981 [14] 1,000 (14] 2,000 1,000
1982 [14] 1,000 [14] 2,000 1,000
1983 [14] 1,000 [14] 2,000 1,000
1984 [14] 1,000 [14] 2,000 1,000
1985 [14,30] 1,040 [14,30] 2,080 [30] 1,040
1986 [14,30] 1,080 [14,30] 2,160 [30] 1,080
1987 [30] 1,900 [30] 3,800 [30] 1,900
1988 [30,32,33] 1,950 [30,32,33] 3,900 [30,32,33] 1,950
1989 [30,32,33] 2,000 [30,32,33] 4,000 [30,32,33] 2,000
1990 [30,32,33] 2,050 [30,32,33] 4,100 [30,32,33] 2,050
1991 [30,32] 2,150 [30,32] 4,300 [30,32] 2,150
1992 [30,32] 2,300 [30,32] 4,600 [30,32] 2,300
1993 [30,32] 2,350 [30,32] 4,700 [30,32] 2,350
1994 [30,32] 2,450 [30,32] 4,900 [30,32] 2,450
1995 [30,32] 2,500 [30,32] 5,000 [30,32] 2,500
1996 [30,32] 2,550 [30,32] 5,100 [30.32] 2,550
1997 [30,32] 2,650 [30,32] 5,300 [30,32] 2,650
1998 [30,32] 2,700 [30,32] 5,400 [30,32] 2,700
1999 [30,32] 2,750 [30,32] 5,500 [30.32] 2,750
2000 [30,32] 2,800 [30,32] 5,600 [30,32] 2,800
2001 [30,32] 2,900 [30,32] 5,800 [30,32] 2,900
2002 [30,32] 3,000 [30,32] 6,000 [30,32] 3,000
2003 [30,32] 3,050 [30,32] 6,100 [30,32] 3,050
2004 [30,32] 3,100 [30,32] 6,200 [30,32] 3,100
2005 [30,32] 3,200 [30,32] 6,400 [30,32] 3,200
Tax rates for regular tax–
Lowest bracket
Tax year Tax Taxable
rate [2] income
(percent) under–[3]
(4) (5)
1913 1.0 20,000
1914 1.0 20,000
1915 1.0 20,000
1916 2.0 20,000
1917 2.0 2,000
1918 6.0 4,000
1919 4.0 4,000
1920 4.0 4,000
1921 4.0 4,000
1922 4.0 4,000
1923 [5] 3.0 4,000
1924 [6] 1.5 4,000
1925 [7] 1.125 4,000
1926 [7] 1.125 4,000
1927 [7] 1.125 4,000
1928 [8] 1.125 4,000
1929 [8] 0.375 4.000
1930 [8] 1.125 4,000
1931 [8] 1.125 4,000
1932 4.0 4,000
1933 4.0 4,000
1934 [9] 4.0 4,000
1935 [9] 4.0 4,000
1936 [9] 4.0 4,000
1937 [9] 4.0 4,000
1938 [9] 4.0 4,000
1939 [9] 4.0 4,000
1940 [9,10] 4.4 4,000
1941 [9] 10.0 2,000
1942 [9] 19.0 2,000
1943 [9] 19.0 2,000
1944 23.0 2,000
1945 23.0 2,000
1946 [13] 19.0 2,000
1947 [13] 19.0 2,000
1948 [15] 16.6 4,000
1949 [15] 16.6 4,000
1950 (16] 17.4 4,000
1951 20.4 4,000
1952 22.2 4,000
1953 22.2 4,000
1954 20.0 4,000
1955 20.0 4,000
1956 20.0 4,000
1957 20.0 4,000
1958 20.0 4,000
1959 20.0 4,000
1960 20.0 4,000
1961 20.0 4,000
1962 20.0 4,000
1963 20.0 4,000
1964 16.0 1,000
1965 14.0 1,000
1966 14.0 1,000
1967 14.0 1,000
1968 14.0 1,000
1969 14.0 1,000
1970 14.0 1,000
1971 14.0 1,000
1972 14.0 1,000
1973 14.0 1,000
1974 [25] 14.0 1,000
1975 14.0 1,000
1976 14.0 1,000
1977 [28] 14.0 [28] 3,200
1978 [28] 14.0 [28] 3,200
1979 [28] 14.0 [28] 3,400
1980 [28] 14.0 [28] 3,400
1981 [28,29] 14.0 [28] 3,400
1982 [28] 12.0 [28] 3,400
1983 [28] 11.0 [28] 3,400
1984 [28] 11.0 [28] 3,400
1985 [28] 11.0 [28,31] 3,540
1986 [28] 11.0 [28,31] 3,670
1987 11.0 [31] 3,000
1988 [34] 15.0 [31,35] 29,750
1989 [34,35] 15.0 [31,35] 30,950
1990 [34,35] 15.0 [31,35] 32,450
1991 15.0 [31] 34,000
1992 15.0 [31] 35,800
1993 15.0 [31] 36,900
1994 15.0 [31] 38,000
1995 15.0 [31] 39,000
1996 15.0 [31] 40,100
1997 15.0 [31] 41,200
1998 15.0 [31] 42,350
1999 15.0 [31] 43,050
2000 [36] 15.0 [31] 43,850
2001 [37] 10.0 [31,38] 6,000
2002 10.0 [31] 12,000
2003 10.0 [31] 14,000
2004 10.0 (31] 14,300
2005 10.0 [31] 14,600
Tax rates for regular tax–
Lowest bracket
Tax year Tax Taxable
rate [2] income
(percent) over-[3]
(6) (7)
1913 7.0 500,000
1914 7.0 500,000
1915 7.0 500,000
1916 15.0 2,000,000
1917 67.0 2,000,000
1918 77.0 1,000,000
1919 73.0 1,000,000
1920 73.0 1,000,000
1921 73.0 1,000,000
1922 58.0 200,000
1923 [5] 43.5 200,000
1924 46.0 500,000
1925 25.0 100,000
1926 25.0 100,000
1927 25.0 100,000
1928 25.0 100,000
1929 24.0 100,000
1930 25.0 100,000
1931 25.0 100.000
1932 63.0 1,000,000
1933 63.0 1,000,000
1934 63.0 1,000,000
1935 63.0 1,000,000
1936 79.0 5,000,000
1937 79.0 5,000,000
1938 79.0 5,000,000
1939 79.0 5,000,000
1940 [10] 81.1 5,000,000
1941 81.0 5,000,000
1942 88.0 200,000
1943 88.0 200,000
1944 [12] 94.0 200,000
1945 [12] 94.0 200,000
1946 [13] 86.45 200,000
1947 [13] 86.45 200,000
1948 [15] 82.13 400,000
1949 [15] 82.13 400,000
1950 [16] 84.36 400,000
1951 [17] 91.0 400,000
1952 [18] 92.0 400,000
1953 [18] 92.0 400,000
1954 [19] 91.0 400,000
1955 (19] 91.0 400,000
1956 [19] 91.0 400,000
1957 [19] 91.0 400,000
1958 [19] 91.0 400,000
1959 [19] 91.0 400,000
1960 [19] 91.0 400,000
1961 [19] 91.0 400,000
1962 [19] 91.0 400,000
1963 [19] 91.0 400,000
1964 77.0 400,000
1965 70.0 200,000
1966 70.0 200,000
1967 70.0 200,000
1968 [20] 75.25 200,000
1969 [21] 77.0 200,000
1970 [22] 71.75 200,000
1971 (23] 70.0 200,000
1972 [24] 70.0 200,000
1973 [24] 70.0 200,000
1974 [24,25] 70.0 200,000
1975 [24] 70.0 200,000
1976 [24] 70.0 200,000
1977 [24] 70.0 203,200
1978 [24] 70.0 203,200
1979 [24] 70.0 215,400
1980 [24] 70.0 215,400
1981 [24,29] 69.125 215,400
1982 50.0 85,600
1983 50.0 109,400
1984 50.0 162,400
1985 50.0 [31] 169,020
1986 50.0 [31] 175,250
1987 38.5 [31] 90,000
1988 [34,35] 28.0 [31,35] 29,750
1989 [34,35] 28.0 [31,35] 30,950
1990 [34,35] 28.0 [31,35] 32,450
1991 31.0 [31] 82,150
1992 31.0 [31] 86,500
1993 39.6 [31] 250,000
1994 39.6 [31] 250,000
1995 39.6 [31] 256,500
1996 39.6 [31] 263,750
1997 39.6 (31] 271,050
1998 39.6 [31] 278,450
1999 39.6 [31] 283,150
2000 [36] 39.6 [31] 288,350
2001 [37] 39.1 [31,38] 297,350
2002 38.6 [31] 307,050
2003 35.0 [31] 311,950
2004 35.0 [31] 319,100
2005 35.0 [31] 326,450
N/A-Not applicable.
[1] Personal exemption amounts were deducted at different points inthe tax computation. depending on the tax year. For some of the
earlier years, they were deducted only from the statutory “net
income” subject to the basic “normal tax,” for other years, only
from the “net income” subject to the “surtax,” and, for still other
years, from the “net income” subject to both normal tax and surtax.
(Footnote 2, below, includes a description of “normal tax” and
“surtax.”) For more recent years, personal exemptions have been
deducted in computing “taxable income,” the current tax base for
“regular” tax purposes.
[2] Tax rates shown in this table are for the “regular” income tax,i.e., for “normal tax” and “surtax,” applicable to U.S. citizens
and residents. Therefore, the rates exclude provisions unique to
nonresident aliens. Tax rates exclude the effect ax credits (which
reduce the tax liability), except as noted, and several specific
add-on or other taxes applicable to all or some tax years. Excluded
are the “war excess profits tax” (1917), “victory tax” (1942-1943).
Social Security “self-employment tax” (starting with 1951), tax
under the “income averaging” provisions (1964-1986) and under the
farm income averaging provisions (starting with 1998), and the
“recapture taxes” resulting from having to recompute and pay back
certain tax credits in later years (starting with 1963), the
“maximum tax” on “earned income” or on “personal service
income”(1971-1981), the “minimum tax” on “tax preferences”
(1970-1983), and the “alternative minimum tax” on “tax preferences”
(starting with 1979). Also excluded are such other taxes as the tax
on recipients of accumulation distributions of trusts (starting
with 1954) and the “special averaging tax” or “multiple recipient
special averaging tax” on recipients of lump-sum distributions from
qualified retirement plans (starting with 1974). In addition, Table
A excludes the taxes associated with the preferential treatment of
capital gains, starting with 1922 (although certain gains received
preferential treatment as early as 1918). At various times, these
treatments have taken the form of special tax rates, special
definitions; different asset holding periods; ceilings on taxes,
and exclusions from income. Included among these special treatments
were “alternative tax” (1938-1986) and its variations for the
earlier years, although all of these taxes were in some way tied to
the a structure for regular tax. Until 1948, a single set of tax
rates applied to all taxpayers, regardless of marital or filing
status, and married couples filing joint returns were taxed on the
combined income of each spouse. However, a second, lower set of
rates was introduced, starting with 1948, for married couples fling
jointly. (To simplify the Table A presentation for these more
recent years, only the lowest and highest tax rates for married
persons fling jointly are shown.) Under this change, the combined
tax of husband and wife became twice the combined tax that would
have applied if their combined “taxable income” (“net income” for
years before 1954) were cut in half. Thus, taxpayers using the
joint return filing status “split” their incomes for tax purposes,
in effect doubling the width of their taxable income (or net
income) size “brackets.” The lowest and highest tax rate brackets
shown in columns 4 and 6 in Table A are, therefore, the brackets
for married couples fling jointly that result from taking into
account this doubling of the bracket widths. Starting with 1952, a
third set of rates was introduced (not shown) for “heads of
household,” i.e., for unmarried individuals who paid over half the
cost of maintaining a home for a qualifying person (e.g., a child
or parent), or for certain married individuals who had lived apart
from their spouses for the last 6 months of the tax year. This
filing status was liberalized, starting with 1970, and provides
approximately half the advantage of the income-splitting described
above. Starting with 1954, the full benefits of income splitting
allowed married couples filing jointly (i.e., the same tax rates
and taxable income brackets) were extended to a new, fourth filing
status, “surviving spouse” (i.e., individuals widowed for 1 to 2
years following the death of a spouse, provided they had a
dependent child and had not remarried). The remaining filing status
was for “single persons,” who used the rates formerly applicable to
taxpayers in general. However, these latter rates were moderated,
starting with 1969, by limiting the tax so that it would not exceed
20 percent more than the tax on married couples fling jointly. One
result of the 1969 law change was that certain married couples
filing jointly had to pay more tax than they would have paid if
each spouse fhad fled separately. To help mitigate this effect, a
special deduction in computing adjusted gross income was allowed
for 1982-1986 for two-earner couples filing jointly. This deduction
was initially 5 percent of the lesser of $30.000 or the “earned
income” of the spouse with the lesser earnings. The percentage was
increased to 10 percent, starting with 1983. The deduction
provision was repealed, starting with 1987, when new, lower rates
and a reduced number of tax brackets began. For tax years preceding
1954, the lowest tax rate, as shown in Table A, was either the rate
for the basic “normal tax” (if there was just one rate for normal
tax) or the lowest of the several rates for “normal tax” (if there
was more than one rate for normal tax). The highest tax rate was
the sum of the uppermost of the graduated rates (if any) for normal
tax, plus the uppermost of the additional, graduated “surtax”
rates, provided that both rates were applied to the same income.
For example, for 1932, there were two graduated rates for normal
tax, 4 percent (on the first $4,000 of income) and 8 percent (on
all income over $4,000), and graduated rates for “surtax” that
ranged from 1 percent to 55 percent. In Table A, the lowest rate
for 1932 is, therefore, shown as 4 percent (the lower of the two
normal tax rates) and the highest rate as 63 percent (the sum of
the 8-percent higher, graduated rate for normal tax on income over
$4,000, plus 55 percent, the highest of the graduated, surtax
rates, on income over $1 million.). As another example, for 1941,
there was just one rate for normal tax, 4 percent, but it applied
to all income. The lowest of the surtax rates, 6 percent, was
applied to all income under $2,000, so that income under $2,000 was
taxed at both the 4-percent normal tax rate and the 6-percent
surtax rate. Therefore, the lowest rate shown in Table A for 1941
is 10 percent, the sum of these two tax rates. The highest rate is
the sum of the 4-percent normal tax on total statutory “net
income,” plus the highest graduated surtax rate, 77 percent on
income over $5 million, so that income over $5 million was taxed at
81.0 percent, the sum of the two rates. For tax years starting with
1954, normal tax and surtax rates were, in effect, combined into a
single rate structure.
[3] The definition of the income base (and, thus. the tax “bracket”boundaries) to which the tax rates were applied differs over the
years, depending on how the following were determined and figured:
statutory adjustments to or exclusions from income, personal
exemptions, itemized deductions expenditures, were sometimes
described as income “credits”): standard deductions, the various
thresholds and ceilings, and statutory “taxable income” (and its
predecessor “net income”). Therefore, the lowest and highest
taxable income amounts, as shown in Table A, are not comparable for
all years, and the amounts described as for statutory taxable
income for tax years preceding 1954 are actually for statutory net
income. (Statutory net income was income after subtracting
deductions but, for most years, was before subtracting personal
exemptions. Statutory taxable income was after subtracting both
deductions and personal exemptions. Taxable income is the tax base
for recent years. Net income required certain adjustments to arrive
at the tax base, depending on whether the income was subject to
normal tax, surtax, or both). See also footnote 2, above.
[4] For 1921-1923, the personal exemption amount for marriedcouples (column 2) increased to $2,000 if statutory “net income”
exceeded $5,000.
[5] For 1923, the lax rates shown (columns 4 and 6) are after a25-percent statutory credit or refund.
[6] For 1924, the lowest tax rate (column 4) is after reduction byan “earned income credit,” equal to 25 percent of the “normal tax”
on the first $5,000 of total statutory “net income” and the normal
tax on the first $10,000 of “earned net income,” but limited to 25
percent of the normal tax on total net income.
[7] For 1925-1927, the lowest tax rate (column 4) is afterreduction by an “earned income credit” equal to 25 percent of the
total tax on the first $5,000 of total statutory “net income” and
the total tax on the first $20,000 of “earned net income,” but
limited to 25 percent of the total tax on earned net income (not to
exceed 25 percent of the sum of “normal tax” on total net income
plus the “surtax” on earned net income.)
[8] For 1928-1931, the lowest tax rate (column 4) is afterreduction by an “earned income credit” equal to 25 percent of the
total tax on the first $5,000 of total statutory “net income” and
the total tax on the first $30,000 of “earned net income,” but
subject to the same limitations described in footnote 7, above. For
1929 only there was a special reduction in normal tax rates as
provided for in a joint resolution of congress.
[9] For 1934-1943, the tax rate (column 4) excludes the effect ofan “earned income credit,” allowed as a deduction equal to 10
percent of the first $14,000 of “earned net income” (before credit)
and the first $3,000 of total statutory “net income” (before
credit), but limited to 10 percent of earned net income (not to
exceed 10 percent of total income).
[10] For 1940, lax rates (columns 4 and 6) include “defense tax,”computed as 10 percent of the total “regular” tax, but limited to
10 percent of statutory “net income” in excess of the total regular
tax.
[11] For 1944-1945, the personal exemption amounts (columns 1-3)were for “surtax” purposes only. The exemption for basic “normal
tax” purposes was $500 per tax return, augmented by the “earned
income” of the spouse, up to $500, on joint returns.
[12] For 1944-1945, the highest tax rate (column 6) was subject toa maximum effective rate limitation equal to 90 percent of statutory
“net income.”
[13] For 1946-1947, tax rates (columns 4 and 6) are the effectiverates after a statutory 5-percent reduction of combined “tentative
normal tax and surtax.” The highest rate (column 6) was subject to
a maximum effective rate limitation equal to 85.5 percent of
statutory “net income.”
[14] For 1948-1986, in addition to the personal exemptions (columns1-2), there were additional personal exemptions for blind
taxpayers) and for taxpayers(s) age 65 or over.
[15] For 1948-1949, tax rates (columns 4 and 6) are the effectiverates after statutory reductions ranging from 17.0 percent of the
first $400 of combined “tentative normal tax and surtax” to 9.75
percent of combined tentative normal tax and surtax over $100,000.
The highest tax rate (column 6) was subject to a maximum effective
rate limitation equal to 77.0 percent of statutory “net income.”
[16] For 1950, tax rates (columns 4 and 6) are the effective ratesafter statutory reductions ranging from 13.0 percent of the first
$400 of combined “tentative normal tax and surtax” to 7.3 percent
of combined tentative normal tax and surtax over $100,000. The
highest tax rate (column 6) was subject to a maximum effective rate
limitation equal to 87.0 percent of statutory “net income.”
[17] For 1951, the highest tax rate (column 6) was subject to amaximum effective rate limitation equal to 87.2 percent of
statutory “net income.”
[18] For 1952-1953, the highest tax rate (column 6) was subject toa maximum effective rate limitation equal to 88.0 percent of
statutory “net income.”
[19] For 1954-1963, the highest tax rate (column 6) was subject toa maximum effective rate limitation equal to 87.0 percent of
statutory “taxable income.”
[20] For 1968, the highest tax rate (column 6) includes a VietnamWar surcharge equal to 7.5 percent of tax (as defined for this
purpose). However, this surcharge did not apply to “regular” tax
generated at the lowest rate.
[21] For 1969, the highest tax rate (column 6) includes a VietnamWar surcharge equal to 10 percent of tax (as defined for this
purpose). However. this surcharge did not apply to “regular” tax
generated at the lowest rate.
[22] For 1970, the highest tax rate (column 6) includes a VietnamWar surcharge equal to 2.5 percent of tax (as defined for this
purpose). However, this surcharge did not apply to “regular” tax
generated at the lowest rate.
[23] For 1971, “earned net income” was subject to a “maximum tax”of 60 percent (not shown in column 6).
[24] For 1972-1981, “earned net income” (broadened to become“personal service net income” after 1976) was subject to a “maximum
tax” of 50 percent (not shown in column 6).
[25] For 1974, tax rates (columns 4 and 6) do not take into accounta statutory rebate of 10 percent of total income tax after credits.
In general, the minimum rebate was $100 and the maximum, $200, but
could not exceed the tax liability.
[26] For 1975, a $30-per-capita tax credit was allowed in additionto the personal exemptions shown in columns 1-3.
[27] For 1976-1978, a tax credit was allowed, in addition to thepersonal exemptions shown in columns 1-3, that was equal to the
larger of $35 per capita or 2 percent of the first $9,000 of
statutory “taxable income.”
[28] For 1977-1986, in order to help preserve the conceptualcomparability of the amounts shown with those for earlier and later
years, the lowest tax rates in column 4 and the lowest “taxable
income” amounts in column 5 exclude the so called “zero tax rate”
and the “zero bracket amount,” which were unique to the tax
computation for these 10 years.
[29] For 1981, tax rates (columns 4 and 6) are after a 1.25-percentstatutory tax credit.
[30] Starting with 1985, the personal exemption amounts (columns1-3) reflect annual adjustments for inflation, using the U.S.
Department of Labor Consumer Price Index for Urban Consumers
(“CPS-U”).
[31] Starting with 1985, tax “bracket” boundaries (columns 5 and 7)were indexed for inflation, using the U.S. Department of Labor
Consumer Price Index (as described in footnote 30).
[32] Starting with 1988, the amount eligible to be deducted forpersonal exemptions (columns 1-3) was phased out for certain
high-income taxpayers. For 1988-1990. this was accomplished as part
of the tax computation (see footnote 34, below).
[33] For 1988-1990, excludes the effect on certain high-incometaxpayers of the phaseout of the amount deductible for personal
exemptions (columns 1-3).
[34] For 1988-1990, the tax rates (columns 4 and 6) exclude theeffects on certain high-income taxpayers of the phaseout both of
the benefit of the 15-percent tax rate (compared to the 28-percent
rate) and the amount deductible for personal exemptions. This
phaseout was accomplished by imposing an additional, 5-percent tax
on income above certain levels, based on fling status, thus
creating a -temporary” 33-percent tax rate. At the point where the
taxpayer had completely phased out the two benefits by use of the
33-percent rate, the tax rate on any remaining taxable income above
the phaseout range returned to 28 percent (see also footnote 35).
As Table A shows. beginning with 1991, this phaseout was replaced
by including an additional, 31-percent, graduated rate for taxable
incomes above certain levels. Two other, higher, graduated rates
were subsequently added, starting with 1993, the higher of which is
shown in Table A.
[35] For 1988-1990, the 15-percent tax rate (column 4), whichapplied to the first 329,750 of statutory “taxable income” (column
5), gradually increased to the top “brackets” rate, 28 percent
(column 6), when taxable income (included in column 7) reached
between $71,900 and $149,250. This was the range at which the
15-percent rate was phased out for certain high-income taxpayers,
all of whose income was then effectively taxed at the higher
28-percent rate through use of the “temporary” 33-percent rate (see
footnote 34. above, for additional information). The boundaries of
the phaseout range were adjusted for inflation for 1989-1990,
although the top tax rate on the taxable income above that covered
by the phaseout range remained 28 percent. Therefore, the top
taxable income and top tax bracket rate shown in Table A for
1988-1990 do not take into account the higher, 33-percent,
“temporary” phaseout rate.
[36] For 2000, the tax rates (columns 4 and 6) do not reflect aspecial statutory refund. partially offset for 2001, of between $300
and $600, depending on the size of income tax for 2000 and filing
status. See also footnote 37, below.
[37] For 2001, the tax rate (columns 4 and 6) does not reflect a5-percent tax credit of up to $300, $500, or $1,000, depending on
the filing status. This credit effectively reduced the lowest rate
on the income shown in column 5 from 15 percent to 10 percent, in
lieu of an explicit 10-percent rate. However, the credit was
reduced by the amount of the special statutory refund made in 2001
(based on tax for 2000), described in footnote 36, above. The 10
percent rate was only for dependents.
[38] For the change in the lowest tax “bracket” boundary (columns 5and 7) for 2001, see footnotes 36 and 37, above.
SOURCE: Advisory Commission on Intergovernmental Relations,
Significant Features of Fiscal Federalism. Volume I, Budget
Processes and Tax Systems, 1995. September 1996 (based, in part, on
Tax Foundation, Facts and Figures on Government Finance, 1988-89
edition, 1988), Pechman, Joseph A., Federal Tax Policy, fifth
edition, The Brookings Institution, 1987 (based on relevant public
laws and reports prepared by the Congressional Joint Economic
Committee, including The Federal Revenue System: Facts and
Problems, 1961, and The Federal Tax System: Facts and Problems,
1964); Statistics of Income-Part I (in particular, the historical
synopses of laws included as appendices in the reports for
1949-1953) and Statistics of Income–Individual Income Tax Returns
(annually, for 1954-1988); and relevant public laws and reports
issued by the Congressional Joint Committee on Taxation for
subsequent years, as well as reports, such as Overview of the
Federal Tax System for 1990, 1991, and 1994. Committee on Ways and
Means, U.S. House of Representatives, and reports issued by the
Congressional Joint Committee on Taxation for subsequent years,
including Overview of Present Law and Economic Analysis Relating to
Marginal Tax Rates and the Presidents Individual Income Tax Rate
Proposals, 2001.
COPYRIGHT 2006 U.S. Government Printing Office
COPYRIGHT 2008 Gale, Cengage Learning
