54 years ago President Kennedy was assassinated in Dallas. I would like to take a quick look back at the Tax System that was in effect in 1963. There are a number of differences and similarities with the current tax code.
Income tax rates where a lot higher, starting at 20% and maxing out at 91% on taxable income over $200,000 for singles and $400,000 for joint filers. However, the rate effectively fell to 87% for singles over $629,500 and couples over $1,259,000.
Ditto on corporate tax rates 30% on the first $25,000 and 52% above that.
Capital gains and dividends were tax-favored. Half of the profits from assets that were held more than six months was excluded. The top tax on gains was 25% for singles filers with taxable income over $18,000 and married couples over $36,000. Recipients of dividends from U.S. corporations were allowed a 4% tax credit on them.
A Kennedy income tax cut proposal had stalled in Congress before his death. President Johnson broke the logjam and signed the bill into law in early 1964. Tax rates cuts were phased in over two years. In 1964, individual rates ranged fron 16% to 77%. The following year, rates started at 14% and topped out at 70%. For corporations, the rates for 1964 were 22% and 50%...22% and 48% for 1965.
At the time, the measure was the largest income tax reduction in history. But it didn't last long. In 1968, Congress Ok'd a surtax for the Vietnam War on individuals and corporations. By 1969, the top personal tax rate had risen to 77%.