|
Just like WWI WWII also had a great impact on taxes. It not only changed taxes during the war, but it also changed taxes today. President Roosevelt had already been working up to raise taxes, and they were already higher than what they were during WWI. Taxes were extremely confusing because there were many different brackets. The highest was 81% on incomes of $5 million and over. A few months before of the attack on Pearl Harbor Roosevelt said that "no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year." $25 thousand then is about $300 thousand today. Of course no one would ever allow this, so the Revenue Act of 1942 made the highest bracket become 88% on incomes higher than $200 thousand. Two years later the high bracket was at 94%. This was almost as much as Roosevelt wanted it to be. WWII affected today's taxes because they introduced payroll withholding. Payroll withholding is the method we use today. Taxes continued to stay pretty high until President Reagan took office in 1981 and dropped the top bracket underneath 70%. Part of the reason of the tax raise was because America decided it was time for a better coast guard, and decided that we needed a better army in conclusion.
|