Historical federal income tax brackets in the United States have moved across a wide range since 1913, when the top marginal rate was 7% and the bottom was 1%. Rates climbed to a peak of 94% during World War II, held above 70% for most of the postwar decades, then fell sharply in the 1980s. Today’s structure has seven brackets running from 10% to 37%, and the One Big Beautiful Bill Act signed on July 4, 2025 made that framework permanent.1The White House. President Trump’s One Big Beautiful Bill Is Now the Law
Where the Brackets Stand for 2026
The seven-bracket structure created by the Tax Cuts and Jobs Act of 2017 is now settled law rather than a temporary provision. For 2026, the rates and thresholds for single filers and married couples filing jointly are:2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- 10% on taxable income up to $12,400 (single) or $24,800 (joint)
- 12% over $12,400 up to $50,400 (single), or over $24,800 up to $100,800 (joint)
- 22% over $50,400 up to $105,700 (single), or over $100,800 up to $211,400 (joint)
- 24% over $105,700 up to $201,775 (single), or over $211,400 up to $403,550 (joint)
- 32% over $201,775 up to $256,225 (single), or over $403,550 up to $512,450 (joint)
- 35% over $256,225 up to $640,600 (single), or over $512,450 up to $768,700 (joint)
- 37% over $640,600 (single) or over $768,700 (joint)
The 2026 standard deduction is $16,100 for single filers, $24,150 for heads of household, and $32,200 for married couples filing jointly. Personal exemptions remain at zero.
How the Income Tax Began (1913)
The 16th Amendment, ratified on February 3, 1913, let Congress tax income without apportioning it among the states by population.3Ronald Reagan Presidential Library & Museum. Constitutional Amendments – Amendment 16 The Revenue Act of 1913 followed within months. It set a base “normal” tax of 1% on net income above $3,000 for a single person or $4,000 for a married couple, with a graduated surtax topping out at 7% on income above $500,000. Those thresholds were high enough that fewer than 1% of Americans owed anything.
World War I ended that gentle beginning. The War Revenue Act of 1917 and the Revenue Act of 1918 pushed the top marginal rate from 15% in 1916 to 67% in 1917, then to 77% in 1918, with the highest bracket applying to income above $1 million. Exemption thresholds dropped, pulling in far more filers.
The 1920s reversed the wartime surge. A series of revenue acts brought the top rate down to 25% by 1925 on income above $100,000. That relief lasted until the Depression collapsed federal revenue. The Revenue Act of 1932 lifted the top rate back to 63% on income above $1 million, and the Revenue Act of 1935 raised it again to 79% on income above $5 million, effective with the 1936 tax year.
The Wartime Peak and the Mass Income Tax
World War II turned the income tax from something that affected the wealthy into something that affected almost every worker. In 1940, roughly 7% of the population paid any income tax. By 1944, about 64% did. Congress did this by cutting exemption thresholds so ordinary wages entered the tax base, and by introducing payroll withholding so employers collected the tax before workers received their paychecks. Those two structural changes reshaped the system more than any rate ever did.
The top marginal rate hit its all-time peak of 94% in 1944 and 1945, applying to taxable income above $200,000. The bracket structure at the time had more than 20 tiers, and the $200,000 threshold in 1944 dollars translates to roughly $3.4 million today. Deductions, exclusions, and preferentially treated income categories shrank the effective bite further. Through the 1950s, when the top statutory rate held at 91%, the top 1% of earners paid an average effective federal income tax rate of about 16.9%. Adding state, local, and payroll taxes brought their total effective rate to around 42%.
The first major break from the postwar high-rate consensus came with the Revenue Act of 1964. Championed by President Kennedy and signed by President Johnson, it cut the top marginal rate from 91% to 70% and lowered the bottom rate from 20% to 14%.
Bracket Creep, Indexing, and the 1986 Reform
Through the 1970s, high inflation pushed ordinary workers into brackets designed for the affluent. A wage increase that only matched price growth could still land a household in a higher bracket. This bracket creep created heavy political pressure for reform.
The Economic Recovery Tax Act of 1981 responded twice over. It cut the top marginal rate from 70% to 50%, and it indexed tax brackets to inflation starting with the 1985 tax year, so bracket boundaries would rise automatically with prices. Indexing has remained a core feature of the code ever since.
The bigger structural change came with the Tax Reform Act of 1986. Congress collapsed more than a dozen brackets into just two: 15% and 28%.4Joint Economic Committee. The Tax Reform Act of 1986 – A Primer The top rate fell to 28%, its lowest reading since before the Depression. To pay for the rate cut, the 1986 act eliminated shelters, curtailed deductions, and closed loopholes. The bottom rate rose from 11% to 15%, making this the only major reform in the income tax’s history where the lowest rate went up while the highest rate came down.
New Brackets and New Surtaxes (1990s–2012)
Two-bracket simplicity did not last. The Omnibus Budget Reconciliation Act of 1993 added a 36% bracket and a 39.6% bracket for the highest earners, with the 39.6% rate applying to taxable incomes above $250,000.5Congressional Budget Office. An Economic Analysis of the Revenue Provisions of OBRA-93
The Economic Growth and Tax Relief Reconciliation Act of 2001, often called the Bush tax cuts, lowered the top rate from 39.6% to 35% through a phased reduction, cut other bracket rates, and added a new 10% bracket at the bottom. Budget rules required the entire package to sunset after 2010.
The expirations produced the fiscal cliff standoff at the end of 2012, resolved by the American Taxpayer Relief Act of 2012. That law made the Bush-era rate cuts permanent for all but the highest earners, keeping brackets at 10%, 15%, 25%, 28%, 33%, and 35% for taxable income below $400,000 (single) or $450,000 (joint). Above those thresholds, the 39.6% rate returned.
Two surtaxes from the Affordable Care Act sit alongside the brackets and effectively raise the top federal rate for high earners. A 3.8% net investment income tax applies to investment earnings when modified adjusted gross income exceeds $200,000 for single filers or $250,000 for joint filers.6Internal Revenue Service. Topic No. 559, Net Investment Income Tax A separate 0.9% additional Medicare tax applies to wages and self-employment income above those same general thresholds.7Internal Revenue Service. Questions and Answers for the Additional Medicare Tax Neither threshold is indexed for inflation, so both capture more taxpayers every year.
The TCJA and the Move to Permanence
The Tax Cuts and Jobs Act of 2017 kept seven brackets but lowered most of the rates. The top marginal rate dropped from 39.6% to 37%, and bracket thresholds shifted so more income was taxed at lower rates.8Cornell Law Institute. Tax Cuts and Jobs Act of 2017 (TCJA) The law also nearly doubled the standard deduction and eliminated the personal exemption.
Those individual provisions were written to expire after December 31, 2025. If nothing had changed, rates would have snapped back to a 39.6% top rate along with a lower standard deduction and the return of personal exemptions. The One Big Beautiful Bill Act signed on July 4, 2025 made the TCJA’s individual income tax provisions permanent instead. The seven brackets of 10%, 12%, 22%, 24%, 32%, 35%, and 37% and the higher standard deduction are now permanent features of the code.
Why the Top Rate Has Never Told the Whole Story
One thread runs through every era: the gap between the top statutory rate and what high earners actually pay. In the 1950s, a 91% top bracket coexisted with an effective federal income tax rate for the top 1% of about 16.9%. Congress has consistently paired high headline rates with deductions, exclusions, preferential rates on capital gains, and income types that fall outside ordinary income entirely. When reformers close those gaps, as the 1986 reform tried to do, the headline rate can come down without necessarily changing how much the wealthy owe.
Capital gains illustrate the point today. For 2026, long-term gains face a 0% rate for joint filers with taxable income up to $98,900, a 15% rate above that threshold, and a 20% rate once taxable income exceeds $613,700. Layering the 3.8% net investment income tax on top brings the highest effective federal rate on long-term capital gains to 23.8%, well below the 37% top rate on ordinary income.
Rates matter. Every percentage point at the top bracket moves billions of dollars. But reading tax history through the top marginal rate alone misses the architecture underneath: what counts as income, which deductions survive, how investment gains are treated, and how many people land in each bracket.