Tax Analysts Blog

And Then There Was One: When Tax Brackets Get REALLY Narrow

Posted on Sep 17, 2010

As debate over extending all/most/some/none of the Bush tax cuts continues to heat up, liberals are giving new attention to an old idea: special tax brackets for the super rich. It's easy to forget -- especially in this bracket-starved era when lawmakers have left us with just half a dozen lines of demarcation in the income tax. But once upon a time, there used to be scads of brackets. And some of them were very, very selective.

Before the 1986 tax reform, the income tax had 15 brackets. That seems like a lot, until you consider this choice fact: In the 1930s, there were more than 50! Take a gander at the Tax Foundation's history of tax rates and brackets and you'll see what I mean.

Back in the salad days of soak-the-rich taxation, some brackets had only a handful of not-so-lucky occupants. And near the top of the income scale, brackets could get lonely indeed. One bracket established in the mid 1930s had only a single taxpayer: John D. Rockefeller, Jr.

The Rockefeller Bracket, created by the so-called Wealth Tax Act of 1935, applied to income over $5 million. That's a big number by any measure, but it's especially impressive when converted to 2010 dollars. To get that sort of narrow distinction today, lawmakers would need a bracket starting around $851 million in annual income (if you want to know how I get this number, visit and try out their relative value calculator.)

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