A half century of Federal income tax changes for individuals

Federal income tax changes for individuals are linked to the first five income quintiles over the last half century and there are many things to observe from it. First, we have noticed that everyone loves the income tax cutting. Most of the changes are tax cuts, which are mostly for the bottom 80% of the population based on income.

Key point to note is that tax cuts are always good news for top income earning groups, because they pay more from their earnings and federal income tax cuts pay more in return. In 2009 and 2010, the top 10 percent income earners paid roughly 70 percent of federal income tax, a major cause of income inequality in United States. Some tax cuts are more broad-based as compared to others, like major federal income tax cuts in 1964 and 2001. If we compare them to 1982 and 2003 tax cuts, the prior tax cuts were broad based.

Former President Bill Clinton raised federal income tax from 36 percent to 39.6 percent for top earning groups in 1993 and decreased the percentage of tax to be paid by lower earning groups. The economic growth, more job opportunities, substantial growth, recessive quarters and no empirical support also affected the federal income tax percentage. Currently a summary was published by New York Times Economix, in which there is a long detail of half century individual federal income tax changes.