The top chart shows the top marginal federal income tax rate from 1925 to 2026. The bars highlighted in teal show the duration of the Tax Cuts and Jobs Act (TCJA) that was passed at the end of 2017 and took effect in 2018. The TCJA sunsets beginning in 2026 when the U.S. tax code will revert to pre-TCJA levels. It is important to note that the current top marginal tax rate is well below the long-term average. However, the marginal brackets only tell part of the story. The bottom chart highlights the average effective tax rate – or the cents of every dollar – that are paid in federal income taxes after adjustments are factored in (e.g., deductions, exemptions, etc.). While the top marginal bracket has experienced greater change, the percentage of taxes paid by the top 1% has remained relatively steady.