Don't Mess With Taxes

Tonight's the night for fans of the retro cable TV series "Mad Men." After a 525-day wait, we finally get a look at what's been happening in the lives of the folks at Sterling Cooper Draper Pryce.

When the program premiered in 2007, it was set in the early 1960s. The fourth season ended in 1965.

A spoiler clampdown has left us guessing as to which year Don Draper, Roger Sterling, Peggy Olson et al will find themselves. We do know, however, that the show will remain in the tumultuous '60s.

Taxes in the '60s: While there definitely were some major differences between today and America 50-plus years ago, some things were the same. People still complained about taxes.

In one episode last season, Don was not happy about the capital gains tax that he could face on the sale of his Ossining, N.Y., home.

And on the personal income tax front, things also were not that pleasant.

As calendars flipped over to 1960, a wealthy American was looking at a possible 91 percent tax rate on his or her earnings -- OK, his earnings, since no woman back then made enough to be in the top tax bracket.

By the time "Mad Men" ended its fourth season in 1965, the tax situation had improved a bit. The top federal individual income tax rate tax rate that year was 70 percent.

Since 1965 is the last year marker we have for the show's time frame, and since that year's tax rate was in effect through the 1967 tax year, 70 percent is this week's By the Numbers figure.

But to cover all the possible bases for tonight's season premiere, here are the tax rates, courtesy the National Taxpayers Union, for the "Mad Men" decade.

I can hear you gasping at that 91 percent top tax rate for tax years 1954 through 1963. But during that period, the the highest personal income tax  tax rate was subject to a "maximum effective rate limitation" equal to 87 percent of "statutory taxable income." See, doing your taxes has always been complicated.

And for the 1968 and 1969 tax years, the top personal income tax rate included a surcharge of 7.5 percent and 10 percent, respectively. That sheds some historical light on the recent discussions of a millionaires' surtax and proves there are no new tax ideas.

Today's New York Times' Big City column also looked at "Mad Men" and taxes, noting:

In a certain sense, wealthy people could live with a justifiable guiltlessness in "Mad Men" New York. Not because they were blind to the city's mounting racial crisis or to the perils of smoking or sexism, but rather because, fiscally speaking, they were paying their due. In 1966, which is where the new season finds us, the federal income tax topped out at 70 percent on income over $100,000 (approximately $700,000 in present-day dollars), a figure reduced from 90 percent in a tax cut enacted two years earlier.

But, says writer Ginia Bellafante, "Long-term capital gains taxes were higher than they are today, and so were New York State income taxes: the richest paid 14 percent in 1966; today they pay 8.82 percent, and current law has that figure reverting to 6.85 percent in three years."

We tax geeks who are "Mad Men" fans can only hope that before the show wraps up in season seven that we get an audit of Don Draper's taxes.

And if you're looking for some more numbers connected to tonight's episode, check out the just-for-fun prop bet-like predictions regarding the usual, albeit less than admirable, traits of our favorite "Mad Men."

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