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Comment by nightbrawler | Hacker News Reader

Some interesting statistics of tax rates: https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco...

- During WWI it peaked at 77% - During WWII it peaked at 94%!!

It didn't really, though. That's the marginal income rate, not capital gains -- it's a tax rate for an empty bracket. It was super effective wartime grandstanding which is still fooling everyone decades later.

Capital gains -- the rate the upper class actually pays -- has never risen above 35% at the federal level. And that's within a few points of 2018 marginal rates when we factor in state level taxes for places like California. The tax moved from federal to state (or to earmarked federal, like NIIT)

Capital gains:

1945: 35% federal + 6% state = 41%

2018: 25% federal + 3.8% NIIT + 13.1% state = 41.9%

Prior to losing SALT, wealthy Californians paid slightly lower marginal rates than in 1945. Trump's changes cause the current marginal tax rate for wealthy Californians to be higher than in 1945 -- the year you're calling out as a peak.

No one really paid 94%.

It did affect certain people, though, like movie actors like Ronald Reagan. His stated rationale for supply-side economics was that back during WW2, him and his peers would do 2 movies/year and then be done working, because doing a 3rd would put them in the top tax bracket and the government would get all the money.

https://toomuchonline.org/the-tax-that-turned-ronald-reagan-...

Yeah. I should say "virtually no one." The tax did apply to a very tiny proportion of high end income.

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