94%! How Tax Rates Have Changed Throughout History

Think your taxes are high now? Think again.

Apr 13, 2014 at 3:05PM

People always complain that their taxes are too high. But in the past, there's been a wide range of tax rates, some lower, some much higher than current levels.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at information that CPA Select gathered about the history of the tax code. Dan notes that when the income tax was first added to the Constitution in 1913, rates ranged from 1% to 7%, but they quickly soared to a maximum of 77% during World War I. After that, top rates fell to 25% during the inter-war era, but when the Depression and World War II hit, rates rose and eventually hit a high of 94%. Dan goes on to discuss the Tax Reform Act of 1986 and its huge impact, cutting tax rates but also eliminating deductions that most taxpayers relied on to avoid paying former high rates. Dan concludes that it'll be interesting to see whether tax reform takes the same course going forward, with lower rates but fewer available tax breaks.

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Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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