You probably won't find many people that enjoy or want to pay taxes on their income, so, not too surprisingly the federal income tax marginal rate is one of those big issues that have a high degree of pertinence to anybody that makes actual income. Because America has a progressive income tax, when discussing today's highest income rate of 39.6%, it is important to recognize that that rate does not kick in until, if you are filing as single, your income exceeds $406,000, whereupon all income above that amount will be federally taxed at 39.6%, but all income below that amount will be taxed at tax tiers associated with the lower amount brackets. For instance, the income from 186,000 to 405,000 will be taxed at 35%, not 39.6%. This means, that even when the highest marginal tax rate is 90%, that only the portion above the highest income, is taxed at that rate, and all income below that is taxed at their respective tax tiers.
It is somewhat surprising, to see that there were times in America's past when the marginal tax rate was over 90%, for instance, from the years 1951-1963 it was as high as 91%, which seems unfathomable, given that Eisenhower was the President from 1953-1961, yet indeed this was so. However, as much as people want to soak the rich, there is something about a marginal tax rate that once it crosses the 50% plateau, seems inherently unfair, even to those that typically despise the extraordinarily wealthy. Additionally, the rich have the best and brightest as their lobbyists, attorneys, tax accountants, and so forth, so when tax rates really do get up and into the stratosphere, while it might look good on paper, that the rich are really now being put to the test, in actuality, behind the scenes, they really aren't.
When it comes to taxes and tax rates, those that make the money, are typically not interested in sacrificing more than they have to, and additionally, with a world that has gotten smaller over time, while lawyers and tax accountants have become more numerous, will find a way, to pay less than what the tax law thinks that it is applying against them. This means that the most effective tax rate is one that does a stellar job in appropriating taxes from those that make more at a rate that makes them a bit uncomfortable, but not so high, that it makes them look or to create ways to avoid them.
Another thing, which is often not recognized, is that some people only have one or possibly two really fantastic earning years, perhaps from stock options, or from an unexpected bonus, or some extraordinary event, to which they never again come close to scaling those heights. In these instances, especially, a super-high tax rate seems quite unfair, since these are the very people that don't have the connections or the insights into how to skirt around super-high tax rates.
While there is talk about once again, scaling up the marginal tax rates to above 50%, no matter what you think about the 1% of the 1%, a tax rate that gives more than half to the government, just seems wrong, and in an era in which the rich know ever trick in the book, it probably wouldn't achieve that distribution of income desired, but instead would vacuum in only monies from the rich suckers, that either don't know better, or are blithely oblivious.