The other day I published a graph showing the effective tax rates from 1979 to 2007. That was from a CBO report. I tried to find effective tax rates dating back before 1979 but didn't find any good resources. SO I decided to just figure it out on my own.
Effective tax rate = taxes / income
The effective tax rate is simply the taxes paid / income for a given year. If you pay $5,000 in taxes and you made $50,000 then your effective tax rate is 10%. So we can do that calculation for the nation as a whole by dividing total personal income tax receipts / total personal income.
I got income tax receipts going back to 1934 from the Budget info table 2.1. I got the personal income totals per year going back to 1929 from the BEA. Report I used. Or make your own report starting from table 2.1 Using the budget info and the BEA info I got the total personal income taxes and total personal income for each year from 1934 to 2009.
Here is my graph showing the average effective income tax rates from 1934 to 2009:
Pre-WWII versus Post-WWII
As you can see, before World War II the effective personal income tax rate wasn't very high at all. From 1934 to 1941 the effective personal tax rate was under 2%. However during WWII taxes increased to the point that the effective personal income tax rate hit 11.9% by 1944. From 1945 onward the tax rate fluctuated up and down over time mostly sticking in the 9-11% range. Only 12 times in 64 years from 1945 to 2009 did the tax rate exceed 11% or drop below 9%.
Is this accurate?
Now my method for figuring this is pretty crude, so I expect theres some margin of error here. I compared my results to the CBO report numbers and my figures for 1979 to 2009 are within the numbers they had +/- 1%. Thats not horribly inaccurate or anything, but its not perfect by any means. I don't know why my figures differ from what the CBO reported but I am guessing that the total personal income includes some things outside of normal taxable individual income.
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