U.S. Federal Tax Rate History

Why we built these charts

Most online resources show U.S. tax rates either as a single static table or as a chart with no annotation. Neither makes it easy to answer the question that actually matters: why did the rate change in a given year? What act of Congress moved it, and what trade-offs did the legislators make?

The three charts above annotate every major tax act on the line, with editorial context for each. The data comes from primary sources (IRS Publication 17 historical tables, IRS Statistics of Income corporate tables, IRS Publication 550 for cap gains), cross-checked against Tax Foundation historical archives and Joint Committee on Taxation legislative summaries.

Things you might not have noticed

• The personal and corporate top rates have rarely moved together. The corporate rate held at 35% from 1993 to 2017 — through three presidential administrations and four Congresses — while the personal rate moved through 39.6%, 35%, back to 39.6%, then 37%.
• 1986 was the only year cap gains and ordinary income were taxed identically. Looking at the personal income chart and the cap gains chart side by side, you can see them converge at 28% in 1988, then diverge again in 1997. Eleven years of equal treatment in 113.
• Cap gains and corporate rates moved in similar arcs through the 20th century. Both were low pre-WWII, peaked in the 1950s-1970s, and got cut sharply in the 1980s. The personal income line is the outlier — it stayed high through the entire 1944-1981 window and only began falling with ERTA.
• Today's effective corporate rate is the lowest in 80 years. Combine TCJA's 21% headline with normal deductions and credits, and the effective federal corporate rate for the S&P 500 sits near 18% — lower than any year since 1942.