Failure to Adjust for Inflation Has Altered Effects of Tax Structure
1st-bracket ceiling set at $3,000 in 1919, equivalent to
- $7,235 in 1972, when 4th bracket added
- $29,808 in 2000
$12,000 threshold for 4th bracket in 1972, equivalent to
- $32,608 in 1987, when it was increased to $17,000
- $49,438 in 2000
1987 law set personal exemptions well below federal level, and remain unchanged; $800 in 1987 equivalent to $1,213 in 2000 (still well under half the federal level)
1987 law set standard deductions at federal levels, but have not been changed; their $3,000 and $5,000 levels are equivalent to $4,548 and $7,581 in 2000