During the first couple of years, the income tax rate was 1 percent for most Americans and 7 percent for the richest ones. Within five years, the top rate hit 77 percent. In 1953, when the income tax turned 40, the top rate was officially above 90 percent. As of January, the top rate is 39.6 percent — a 465 percent increase from the original 1913 level.
Obama made political hay with his promise to raise taxes only on the wealthiest Americans, thereby dividing the populace into those who should be happy they didn't get a tax increase and those who should not (in Obama's view) complain about being overtaxed. But the lesson from 1913 is that what initially affects the few will eventually affect the many.
Washington's appetite for revenue won't stop with higher taxes on “the wealthy.” It certainly won't stop with the latest rate adjustment for those Americans. The definition of “wealthy” will continue to be elastic. If you think Obama has no plans to increase taxes on more Americans who are now in a lower tax bracket, you are wrong.
The recent tax hike was but the icing on the birthday cake.