There is a proposal Republicans often make during presidential campaigns or tax debates, and it goes something like this: Taxes are confusing, so we should reduce the number of tax brackets.
100 years of tax brackets, in one chart
The debate around brackets often misses the point.
And if you’re enraged by how confusing it is to do your taxes, this can sound like a good idea.
It’s the exact argument House Speaker Paul Ryan made during the tax reform debate, while also saying we should be able to do our taxes on a postcard. It’s a proposal that Donald Trump made during the campaign, as did his competitors Marco Rubio, Ben Carson, and Jeb Bush, among others.
But this interactive chart explains why that’s a red herring:
In short, tax brackets are among the easiest parts of the tax code, thanks to modern software and, well, math. (The other rationale for fewer brackets — argued by Carson during the campaign — is that having different tax rates based on income is socialism, which is why he supports a flat tax.)
But as the graphic above shows, the US has historically taxed the very wealthy more than the somewhat wealthy — and way more than the middle class. In the 1960s, the tax brackets on the high end started to disappear, and during Ronald Reagan’s presidency we went down to just two brackets. That meant that many middle-class citizens were in the same tax bracket as millionaires.
Since the beginning of Reagan’s term, wealth inequality has been on the rise — with the gap between the top 0.1 percent and everyone else, including many quite affluent families, growing.
Now, this isn’t to say that more tax brackets is a good thing. In fact, if we wanted to do a little more math, we could get rid of brackets entirely and create some kind of formula that would tax an incrementally higher rate for every additional dollar you earn. But to think tax brackets are the reason taxes are so complicated completely misses the point.
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