In addition to very high tax rates in the upper brackets, we used to have income averaging.
What has been proposed is far more modest than what we had decades ago.
This is from Google.
“The top marginal tax rate in 1960 was 91%, which applied to income over $200,000 (for single filers) or $400,000 (for married filers) – thresholds which correspond to approximately $1.5 million and $3 million, respectively, in today's dollars.”
But another part of the tax code that was eliminated under Reagan was income-averaging. If you made a modest income for years, then had a windfall, for example, you published a best-selling book, you could adjust your income averaging it over 5 years. Again from Google:
“Since 1987, the federal tax code requires taxes on an extraordinary income bulge to be paid in full in the year the money was paid, regardless of whether this pushes the taxpayer into a higher tax-rate bracket. The major exceptions are for farmers and fishermen, who are still allowed to use income averaging, and, in some cases, for lump-sum retirement plan distributions.”
Income averaging was enacted in 1964, as far as I can tell, so it was in effect for over 20 years. I think adding averaging to the proposed higher tax rates might help ease some of the fears. Perhaps some people are genuinely concerned that a one time windfall might be taken away by the higher tax rates. I think they are set so high that’s not really something 99% of us need to worry about, but so many of us think we are just a step away from vast riches. Personally, I am more concerned that so many people are struggling with poverty, and that so many more are one accident, illness, or layoff away from poverty.