Some of the basketball fans who watched the University of Michigan dominate last week’s NCAA men’s basketball tournament or saw UCLA win the women’s bracket may believe that those tournaments have always started with 68 (or at least 64) teams. But there used to be a lot fewer teams — and a lot fewer brackets — for those tournaments. The original men’s tournament, played in 1939, tipped off with only eight teams. As the sport spread and became more popular, more competitive and more stratified, we eventually got to a round of 64. And not only that: Four more teams play for the chance to get into that round.
From 1918 to 1921, the United States had 56 tax brackets. But today there are only seven.
As the basketball tournaments’ brackets have become more expansive, the U.S. tax code has essentially worked in the reverse. At its peak, from 1918 to 1921, the United States had 56 tax brackets. But today there are only seven. This quiet collapse in the number of tax brackets has come along with a new Gilded Age fueled by growing income inequality. While March Madness has come and gone, April 15 — Tax Day — is a good time to examine this madness in our tax code.
Let’s start with how we got here. Since the Clinton administration, every U.S. president has passed significant tax legislation, but the basics of the federal income tax have changed little: We’ve gone from five to seven tax brackets, and the top marginal tax rate has bounced between 35% and 39.6%. By historical standards, these are minor changes. From 1916 to 1986, on average, the U.S. had more than 27 different federal income tax brackets each year and a top marginal tax rate of 70%.
It is time to bring back that norm of the past. Sure, more tax brackets might sound like a headache. President Ronald Reagan slashed the number of brackets from 14 to 2 in the name of simplicity. But let’s be honest. What makes the tax code a labyrinth isn’t figuring out which tax bracket you’re in. That part is basic arithmetic. Instead, the complexity in our tax code is due to the trillions of dollars of tax expenditures we have in the form of credits, deductions and exclusions that get at everything from mortgages to student loans to retirement savings.
The number of tax brackets there are should not be made a scapegoat for tax complexity. And more brackets can help us with three fundamental challenges: income inequality, fairness and our country’s fiscal health.
Income inequality has exploded in recent decades, especially at the top end of the income distribution, but the U.S. tax code hasn’t adapted to that reality; if anything, it’s fueled income inequality. From 1979 to 2019, the middle three quintiles of earners saw their average income rise by 59%, after accounting for taxes and transfers. With the help of redistributive programs, including the child tax credit, the bottom 20% saw its post-tax and -transfer incomes rise by 94%.
Both of the increases the working class and the middle class saw were dwarfed by the richest Americans. The top quintile saw its income grow 123%, while the very top 0.1% saw its income skyrocket 507%, as tax cuts overpowered the progressive elements of the tax code. Rather than returning to the failed trickle-down economics of tax cuts for the wealthy, more brackets at the higher end could help curb the rampant rise of income inequality.
Zuckerberg should be taxed at a higher rate than the person performing your appendectomy or your hip replacement surgery.
The more brackets there are, the fairer things would likely be. In 2022, tax filers making more than $663,164 were all in the top tax bracket. The more than 1.5 million tax filers in the top 1% included top surgeons, some small-business owners, hedge fund managers and Fortune 500 CEOs. The 153,801 filers in the top 0.1% that year made more than $3.2 million; the 15,380 filers in the top 0.01 percent made more than $17.8 million; and the 1,538 filers in the top 0.001 percent made more than $85.4 million. Despite very different lived experiences, though, two married doctors would have been in the same tax bracket as Mark Zuckerberg. It shouldn’t be that way. Zuckerberg should be taxed at a higher rate than the person performing your appendectomy or your hip replacement surgery.
Last, more tax brackets would help policymakers be more targeted in raising revenue through the federal income tax. Because of a steady drumbeat of tax cuts we haven’t paid for, the U.S. fiscal situation is dire. The Congressional Budget Office projects that interest payments on our debt alone will cost $2.1 trillion in 2036, more than what we spent combined on Medicare, Medicaid and veterans’ programs in 2025. These numbers trigger a five-alarm fire for economists of both parties.
Congress needs to raise more revenue and should give itself the ability to decide how much to raise from upper-middle-class families and the wealthiest. While other tax reforms are needed, such as those dealing with capital gains and estate taxes, more tax brackets and a more progressive structure will give Congress important flexibility regarding the taxation of ordinary income.
During the 1950s, the top tax rate of 91% applied to families making well over $4 million in today’s dollars. During that decade, there were 24 tax brackets, and Congress didn’t think it problematic to ramp up rates on the rich.
If a similar structure were in place today, there would be brackets that reflect the differences in income between surgeons, car dealers and hedge fund managers. And those brackets could fit within a range of tax frameworks. It could be compatible with, say, congressional candidate Luke Bronin’s proposal to raise the tax top rate to 47% or with New York Rep. Alexandria Ocasio-Cortez’s proposal to bring the top rate to 70%. This structural reform would give policymakers much-needed flexibility to set rates in ways that can achieve multiple policy goals.
Since 1939, the NCAA has been nimble enough to adapt its brackets to a changing sport and a changing society. Congress should follow suit.
Samarth Gupta is a Fellow at the Roosevelt Institute. He served as a policy advisor at the Treasury Department from 2022 to 2025.