Once upon a time, we taxed the rich.

In 1950, the 400 wealthiest Americans paid more than two-thirds of their income in taxes. By 2018, for the first time in over a century, they paid a lower rate than the working class. Scroll to watch it happen.

70% top 400 tax rate, 1950
23% top 400 tax rate, 2018
26% working-class rate, 2018
scroll to begin, 1950
2018
For the first time, the top 400 pay 23% — less than the bottom 50%’s 24%.
0%10%20%30%40%50%60%70%Bottom 10%10–2020–3030–4040–5050–6060–7070–8080–9090–9595–9999–99.999.9–99.9999.99–top 400Top 400income group, poorest → richest 26%23%
95th–99th pct.
1950: 28%

1950 — the postwar high-water mark

The Rich Paid

After the New Deal and World War II, the U.S. ran a progressive tax system. A 91% top marginal income-tax bracket, a strong corporate tax, and active estate tax all fell hardest on concentrated fortunes.

Combining every tax (federal, state, local, income, payroll, corporate, property, and estate) the 400 richest Americans paid an average of about 70 cents of every dollar of income in taxes and still lived comfortably. The working class paid roughly a sixth of theirs.

70% for the top 400 vs. 16% for the bottom 10%

1962 — the Kennedy years

Still steep, but the cracks are showing

The top marginal rate is still 91%, but the base beneath it is eroding: capital gains are taxed at a much lower 25%, while the ultra-rich increasingly shelter income in retained corporate earnings rather than dividends or wages. Kennedy's proposed cuts, enacted in 1964, bring the top rate down to 70%.

Top 400 rate: 54%

1980 — neoliberals take power

Reagan's Trickle Down

Reagan's 1981 tax cuts will soon lower the top income-tax rate from 70% to 50%, and the 1986 Tax Reform Act will cut it again, to 28% — accelerating a decades-long shift away from taxing capital and concentrated income.

Top 400 rate: 47%, and falling from here

2000 — Bush begins tax cuts

Bush begins tax cuts

By 2000, the gap between what the working class and the ultra-rich pay has narrowed enormously since 1950. The 2001 and 2003 Bush tax cuts lower top income and investment tax rates further still.

Overall average: 31% — near its high point

2010 — after the crisis

The curve keeps flattening

Low rates on capital gains, dividends, and corporate profits, set by Bush, persist through the 2008 crisis, are extended by Obama in 2010 and made permanent for all but the highest earners in 2012. The average American's rate, meanwhile, changes little.

Top 400 rate: 28% — nearly level with everyone else

2018 — the crossover

For the first time, the rich pay less

In 2017, Trump and Republicans in Congress cut the corporate tax rate from 35% to 21% and cut taxes to the top of the income distribution. The 400 richest Americans reach a new milestone, paying a lower total tax rate than the working class.

Top 400: 23% · Working class: 26% · Overall average: 28%