Changing Tax Brackets

Sarah Vanderbilt | July 24, 11:06 am

Fifty years ago, there were 24 different tax brackets, with a top rate of 91 percent applying to taxable income over $400,000 for joint filers (that would be $3 million in today's dollars).

The largest change since then came with the 1986 tax overhaul which cut the number of brackets to two — those with less than $32,450 in taxable income paid 15 percent and those making more paid 28 percent.

In the quarter century since, new brackets have been added to the top and bottom of the income scale, and in accordance with the 1986 law, all boundaries have been indexed to rise with inflation, accounting for the stair-step appearance of the graph in later years.

The most recent change to the structure of individual income tax brackets was made under the Bush tax cuts of 2001 and 2003. Along with cutting existing rates, those laws also added a new 10 percent bracket to the bottom of the income scale.

Mouse over the graph for more detail on the structure of brackets by tax year.

Read more on No Taxation Without Consternation

About the Data

The data was collected by the Tax Foundation and can be viewed in its entirety here. The document includes both nominal incomes, shown in the graph, and inflation-adjusted amounts.