For Reference. The 1954 Tax Rates. Republican President Eisenhower In Office.

With respect to the Federal income tax on individuals, the 1954 Code imposed a progressive tax with 24 income brackets applying to tax rates ranging from 20% to 91%. For example, the following is a schedule showing the Federal marginal income tax rate imposed on each level of taxable income of a single (unmarried) individual under the 1954 Code:

Income level Tax rate 2008 PPC Adjusted Income [2]
up to $2,000.00 20% up to $37,500.00
$2,000.01 – $4,000.00 22% $37,500 – 75,000
$4,000.01 – $6,000.00 26% $75,000 – 112,500
$6,000.01 – $8,000.00 30% $112,500 – 150,000
$8,000.01 – $10,000.00 34% $150,000 – 187,500
$10,000.01 – $12,000.00 38% $187,500 – 225,000
$12,000.01 – $14,000.00 43% $225,000 – 262,500
$14,000.01 – $16,000.00 47% $262,500 – 300,000
$16,000.01 – $18,000.00 50% $300,000 – 337,500
$18,000.01 – $20,000.00 53% $337,500 – 375,000
$20,000.01 – $22,000.00 56% $375,000 – 412,500
$22,000.01 – $26,000.00 59% $412,500 – 487,500
$26,000.01 – $32,000.00 62% $487,500 – 600,000
$32,000.01 – $38,000.00 65% $600,000 – 712,500
$38,000.01 – $44,000.00 69% $712,500 – 825,000
$44,000.01 – $50,000.00 72% $825,000 – 937,500
$50,000.01 – $60,000.00 75% $937,500 – 1,125,000
$60,000.01 – $70,000.00 78% $1,125,000 – 1,312,500
$70,000.01 – $80,000.00 81% $1,312,500 – 1,500,000
$80,000.01 – $90,000.00 84% $1,500,000 – $1,687,500
$90,000.01 – $100,000.00 87% $1,687,500 – $1,875,000
$100,000.01 – $150,000.00 89% $1,875,000 – $2,812,500
$150,000.01 – $ 200,000.00 90% $2,812,500 – $3,750,000
$200,000.01 or more 91% $3,750,000 or more

 

Interestingly enough, this tax code imposed a 4% credit cap on dividend income which previously was tax exempt.   Some believe this change triggered a fundamental change in investing.  From a commentator over at economist’s view named ‘Ron.’

I could just agree sentimentally if I did not realize that the 1954 tax code implemented the transfer of primary investment returns from previously exempt dividends to realization of capital gains. This ushered in an age of speculation and corporate mergers, increasingly LBO and rarely stock swap, with all the attendant reductions in internal investment. Subsequent financial deregulation was merely an attempt to optimize the rate of destruction of the real productive economy to the benefit of investment bankers and hedge funds.

Another frequent commentator at economist’s view, identified only as ‘paine,’ said he shared Ron’s ‘devotion to highly idiosyncratic turning points,’ and then proceeds to list two more events that don’t get much attention today, but definitely impacted future events.  Paine listed the 1951 accord between the US Treasury and the Federal Reserve which restored the Fed’s independence and the close of the gold window in 1971.

I prefer the surrender by the treasury of the fed to wall street in January 1951.  Since then full employment has been impossible if for no other reason then wall street doesn’t want a wage spiral.

But the real universal, opens all locks key, is of course international payments flow prior to another key turning point:  The closing of the gold window in the late months of 1971.  That entrained the era of forex flex.  There are others but yours is nicely obscure.

Both commentators are obviously academically knowledgeable.   Paine is an economist.  We don’t know what Ron is, but his citation of the 1954 tax code goes beyond hobby.

Beezer here.  Maybe we should restore some exemption, like the 4% credit cap, on dividend income while placing a similar cap on capital gains that can be assessed at 15% instead of the higher income tax.

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4 Responses to “For Reference. The 1954 Tax Rates. Republican President Eisenhower In Office.”

  1. BEEZERNOTES » Blog Archive » There Is A Tax Break I Like. Says:

    [...] a recent post, I discussed the 1954 tax rates under President Dwight Eisenhower, a Republican.  The top marginal [...]

  2. it's only right that we ask everyone to pay their fair share - Page 27 Says:

    [...] their income in taxes. They paid 91% on everything they earned over $200,000, or, adjusted as per this website's method, everything over $3.75 million in today's dollars. Reply With [...]

  3. Howie Hawkins Says:

    What is PPC Adjusted Income in the third column in the chart? Using the BLS Inflation Calculator, I get a multiple of 8.52 to determine the income levels in 2012 that correspond to the 1954 levels. They are about half of what the chart shows for 2008. The footnote in the chart leads to the Bureau of Economic Analysis web page, but I find no definition of PPC there.

    For anyone interested, Eisenhower tax rates on the top 10% of income earners (the only one’s who gained in real terms since 1973) would immediately cover the federal deficit:http://www.cpegonline.org/workingpapers/CPEGWP2011-2.pdf.

  4. Orange County DUI Defense Says:

    I finallly found your site again! I had come across it a while back, and finally able to read it again… always insightfull…Thanks again!

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