Now that the nation’s favorite season has come to an end with the conclusion of the Super Bowl, Americans can turn attention to their least-favorite season — Friday was the first day they could begin filing federal income tax.
That is a bit later than expected; last year’s partial government shutdown pushed the process back about 10 days, and delayed the Internal Revenue Service in making forms available. But while many might have hoped the delays would somehow become permanent, taxes are inevitable. In fact, we have heard, they are one of only two things in life that are certain.
With that in mind, a couple items about this year’s federal taxes are worth noting. The top marginal rate for the highest incomes has gone up to 39.6 percent from 35 percent. Legislation passed early in 2013 made the tax cuts passed under President George W. Bush permanent for most Americans, but allowed the cuts to expire for the highest income bracket. Despite the rise in the tax rate, it still is a far cry from the 70 percent that was being paid when Ronald Reagan took office in 1980.
After cutting the top rate to 50 percent by 1986, Reagan spearheaded sweeping reform. As Janet Novack of Forbes explained in 2012: “President Ronald Reagan … chopped the top individual income tax rate from 50 percent to 28 percent; curbed special deductions, exclusions and breaks; gave most families a tax cut; left the richest 1 percent paying a slightly higher share of taxes; and didn’t add to the deficit.” That tax reform, by the way, was devised and passed through bipartisan efforts, and it is rather remarkable to think of the highest rate going from 70 percent to 28 percent during the course of one presidency.