Back "in the day" I remember my effective federal/state/local (after deductions) pushing well above 40%, so I asked an AI (Perplexity) to compare the federal rates of 1984 to the current onmes:

Today's US federal income tax rates (for tax year 2026, applicable to 2025 income) follow a 7-bracket progressive system topping at 37%, a sharp reduction from 1984's 15-bracket structure that reached 50%. Fewer brackets and wider ranges now mean lower effective rates for most, with inflation adjustments expanding thresholds annually.

Bracket Comparison (Single Filers)
Rate 1984 Thresholds (approx.)..2026 Thresholds
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10-11% $0–$3,540....................$0–$12,400
12-16% $3,541–$11,240..........$12,401–$50,400
18-26% $11,241–$24,460........$50,401–$105,700 (22%)
30-38% $24,461–$43,190.......$105,701–$201,775 (24%)
42% $43,191–$57,550.......$201,776–$256,225 (32%)
48% $57,551–$85,130.......$256,226–$640,600 (35%)
50% Over $85,130..............Over $640,601 (37%)
Key Changes
Rates dropped post-1986 Tax Reform Act, simplifying from 15 brackets in 1984 to 7 today, with top marginal rate falling from 50% to 37%. Standard deductions rose significantly (e.g., $2,300 single in 1984 vs. ~$16,100 in 2026), reducing taxable income for many.

But then I remembered to adjust the 1984 rates for inflation:

Adjusting 1984 tax brackets to 2026 dollars using CPI inflation (multiplier ≈3.12x, from 103.9 to 324.1) reveals much narrower bands back then, with higher rates kicking in at lower real income levels. Today's wider brackets and lower top rate (37% vs. 50%) result in lower marginal taxes for equivalent purchasing power.

Inflation-Adjusted Comparison (Single Filers, 2026 Dollars)...2026 Thresholds
Marginal Rate 1984 Adjusted Thresholds

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11% $0–$11,043............................$0–$12,400 (10%)
15% $11,044–$35,063 -
18-28% $35,064–$134,733 (various).......$12,401–$50,400 (12%)
33-38% $134,734–$265,567...............$50,401–$105,700 (22%)
42% $265,568–$560,000 (est.).......$105,701–$201,775 (24%)
44-45% $560,001–$850,000 (est.).......$201,776–$256,225 (32%)
48-50% Over $850,000..................$256,226–$640,600 (35%); Over $640,601 (37%)
Main Insights
Inflation-adjusted, 1984's top 50% rate hit at ~$266,000 (today's dollars), vs. today's 37% at $641,000+. More brackets in 1984 created "bracket creep" without inflation indexing until 1985; post-1986 reforms simplified and cut rates substantially

The US federal budget deficit was $175.3 billion in fiscal year 1984 (ending Sept. 30), amid Reagan-era spending and tax cuts. For FY 2025 (most recent full year, ending Sept. 30, 2025), it totaled approximately $1.78 trillion, down slightly from $1.82 trillion in FY 2024 due to tariff revenues and spending restraint.

As a comparison:

European countries' personal income tax systems are mostly progressive, with top marginal rates averaging 38.5% across 35 nations (43.4% for OECD members) in 2026. Rates vary widely: 10% in Bulgaria/Romania to 60.5% in Denmark, often including social security contributions.

Top Marginal Rates (2026)
Country/Region Top Rate Notes
Denmark 60.5% Highest; new bracket over 375k
France 55.4% Among EU's big 5
Austria, Belgium, Portugal, Spain, Sweden >50% Northwestern high-tax cluster

While I can likely (haven't done my taxes yet) complain that I'm unlikely to get any of the deductions Steve mentioned and my gross income is likely going to be far less than I was making in 1984, even the top rate today is relatively benign in comparison. When you add to the European income tax rates, the effects of double-digit VAT taxes, it is clear that, compared to more of our peers, US taxes are very low (probably accounting for our high deficit). Everyone loves to complain that their taxes are too high, but, in reality, the US tax rate is too low to support the current expenses of our federal government. I'll leave it to each reader to draw their own oppinion as how to best address this paradoxical situation.

Jeff