The claim: The corporate tax rate under Eisenhower was 90%
a recent facebook mail states that the corporate tax rate was 90% under President Dwight D. Eisenhower, who held office from 1953 to 1961.
“Why?” reads the April 28 post, below a photo of Eisenhower. “Because high corporate tax rates create incentives for large companies to spend on things like new locations, new hires, new equipment, and product research and development that are deducted from taxable profits… It’s not socialism. It’s responsible economy”.
The post, from the popular left-wing Facebook group The Other 98%, amassed more than 12,000 shares and 25,000 interactions. Other bill posted the same information with a different graph. USA TODAY has reached out to both cartels.
Follow us on Facebook! Like our page to receive updates throughout the day on our latest debunkings
But the numbers are wrong here. While the individual income tax rate for some earnings rose to more than 90% during Eisenhower’s tenure, the corporate tax rate was closer to half that level.
Corporate taxes exceeded 52% under Eisenhower
During Eisenhower’s presidency, the corporate tax rate ranged from 30 percent to 52 percent, according to the Tax Foundation. historic information on federal income taxes on US corporations.
Like the federal income tax today, corporate taxes during the Eisenhower era followed a gradual model in which tax rates increased as income increased. From 1952 to 1963, a period spanning the entire Eisenhower presidency, IRS historical data confirms that the tax rate was 30% for the first $25,000 in profits a business made, and 52% for anything over that amount.
Fact check: Posting misleading information about Putin’s role in Russian bank nationalization and currency creation
Tax codes have changed several times since Eisenhower’s presidency. From 1993 to 2017, the US used a much more complex graduated corporate tax code than the two-tier one of the 1950s and early 1960s, using eight different brackets, according to the Tax Foundation. However, the Tax Cuts and Jobs Act, passed in 2017 under President Donald Trump, abolished the graduated systemestablishing a corporate income tax of 21% according to the text of the bill.
Eisenhower’s presidency saw some tax rates above 90%, but that figure only applied to individual income taxes of those who earn the most. For married people who filed a joint return in 1953, for example, any income over $200,000 was taxed at 90%, over $300,000 at 91%, and over $400,000 at 92%.
Today, individual income tax rates are much lower, with top tax rates down to nearly a third of their mid-20th-century highs. For the 2022 tax year, individual individual taxpayers with income over $539,900 are taxed at 37%, according to the I.R.S.. For married couples filing jointly, the same rate applies to any income over $647,850.
Our rating: False
Based on our research, we rate as FALSE the statement that the corporate tax rate under Eisenhower was 90%. The corporate rate ranged from 30% to 52% between 1952 and 1963. One part of the tax code reached over 90%, but that rate only applied to the individual income taxes of top earners, not to taxes on personal income. corporate income.
Our data verification sources:
- Tax Foundation, August 24, 2021, Historic U.S. Federal Corporate Income Tax Rates and Brackets, 1909-2020
- Fiscal Policy Center, accessed May 6, How did the Tax Cuts and Jobs Act change business taxes?
- HR 1, December 22, 2017, Law to provide for conciliation under the terms of titles II and V of the concurrent resolution on the budget for the 2018 financial year.
- Tax Foundation, August 24, 2021, Historic U.S. Federal Individual Income Tax Rates and Brackets, 1862-2021
- IRS, November 10, 2021, IRS Provides Tax Inflation Adjustments for Tax Year 2022
- IRS, accessed May 6, SOI Tax Statistics – Historical Table 24
Thank you for supporting our journalism. May Subscribe to our print edition, ad-free app, or e-newspaper replica here.
Our fact-checking work is supported in part by a grant from Facebook.
Reference-www.usatoday.com