Thus Mr. Lee correctly notes that this statement was incorrect:
“In 1958, an 81% marginal tax rate applied to incomes above $1.08 million, and the 91% rate kicked in at $3.08 million. These figures are in unadjusted 1958 dollars and correspond today to nominal income levels that are at least 10 times higher . . .”
In reality, those $1.08 million and $3.08 million had been adjusted for inflation.
The piece has been corrected by the WSJ here. Scroll to the bottom to see the full changes, but note this:
In 1958, an 81% marginal tax rate applied to incomes above $140,000, and the 91% rate kicked in at $400,000 for couples. These figures are in unadjusted 1958 dollars and correspond today to nominal income levels that are about eight times higher.
Take a look at Mr. Lee’s piece for further context, but the other corrections made by the WSJ include:
In the same year, roughly 10,000 of the nation’s 45.6 million tax filers had income subject to a rate of 81% or higher. The number is an estimate and is inexact because the IRS tables list the number of tax filers by income ranges, not precisely by the number who paid at the 81% rate. The original article said the number of such filers was 236.
Now, 10,000 is not such a large number either, but . . .
And then the WSJ notes this:
Also in 1958, about two million filers (4.4% of all taxpayers) earned the $12,000 for married filers needed to face marginal rates as high as 30%. These Americans paid about 35% of all income taxes but could not all be defined as genuinely wealthy. The article misstated these numbers.
The original article had said this:
In 1958, approximately 28,600 filers (0.06% of all taxpayers) earned the $93,168 or more needed to face marginal rates as high as 30%. These Americans—genuinely wealthy by the standards of the day—paid 5.9% of all income taxes.
4.4% of all taxpayers is still a small percentage, but it’s a lot larger than 0.06%.
Tax wonkery to be sure, but, as it should not be necessary to say, facts do matter. Re-reading Peter Schiff’s (amended) article, the broader argument still holds up, but the original errors (and anyone can make mistakes) are, alas, to use a soccer term, an own goal.