This rate was established by the Revenue Act of 1918 as the U.S. prepared to enter World War I. For context:
When the individual income tax was first enacted in 1913, the top marginal rate was only 7% on income above $500,000.
The 73% rate remained in effect until 1922, when post-war reductions began.
It's important to note that this was the marginal tax rate, applied only to income exceeding a specific high threshold, not a person's entire income. The rate was much higher than the rates seen in recent years, which have generally fluctuated in the 30% to 40% range.


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