The New York Times has a truly amazing graphic presentation of how the rich used to pay taxes. Check out the image here. The data comes from old IRS filings, made public through the National Archives. They show, for example, that in 1941 — PRIOR to the WWII tax hikes — Eugene Grace, the president of Betehem Steel and one of the highest paid Americans, earned $522,637 (the equivalent of about $7.5 million today), had an adjusted gross income of $336,953 — and paid 66 percent of it, or $114,902, in federal income taxes. Thomas Watson, the president of IBM, paid 69 percent of his AGI in taxes.
Back then, the top marginal tax rate was 81 percent.
And guess what? Those folks were still very rich, still worked hard, still built big companies and created the most poweful economy in the world.
In fact, I could argue that it was precisely BECAUSE OF those high marginal rates that America grew so prosperous in what are now seen as the good old days.