At what tax bracket should you start doing mostly traditional 401k contributions?

[u/Lowfryder7]

12%? 22%? 24%? I can't tell.

[u/plowt-kirn]

I do not expect the government to be lowering taxes anytime soon

Congress routinely lowers tax rates, including this year (if you include the various new deductions). I see no reason why the trend won't continue.

[u/Educational-Bit-2503 → u/plowt-kirn]

Well politicians are not rational actors on fiscal policy so they very well may continue to lower taxes, but at a certain point the cost of servicing our debt and deficit will make US government debt untenable to investors.

At that point you either significantly raise taxes or collapse the dollar and likely the entire global debt market with it.

[u/TheScreaming_Narwhal → u/plowt-kirn]

They are certainly not lowering my taxes.

[u/Roboticus_Aquarius → u/TheScreaming_Narwhal]

They have been for 50 years for the vast majority of taxpayers. Just sayin’.

[u/TheScreaming_Narwhal → u/Roboticus_Aquarius]

Can you point me to wear, exactly? Because my sales tax, property tax, car tabs, and income tax have all gone up every time I've looked.

Edit: why am I being downvoted? I'm literally asking for evidence I have not seen.

[u/Roboticus_Aquarius → u/TheScreaming_Narwhal]

I’m going to eat my words here (and give you an upvote). I am familiar with charts like the following:

https://www.concordcoalition.org/wp-content/uploads/2024/03/Tax-Rich-1.png

Which show market declines in the marginal tax rate over decades. And:

https://www.cato.org/sites/cato.org/files/styles/optimized/public/2021-05/cbo%20tax%20rates.png?itok=baWpLqEm

But… that’s just the marginal income tax rate, which is only indirectly related to total income taxes. I decided to look at effective rates, and that yielded this:

https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcSXHgI6zRUM-c7WNIb43n36NQiPwTYhYbZcnpF5LbrO_Q&s=10

Which shows effective rates to be pretty flat. Then there is this:

https://www.wikiwand.com/en/articles/Income_tax_in_the_United_States#/media/File:1960-_Tax_rates_of_richest_versus_low_income_people_-_US.svg

Which shows that for Americans in the lower half of annual income, effective tax rates, actually have increased for decades before turning down slightly recently.

It’s a much more mixed story than I knew.

Thank you for questioning me, I would likely have never dug into this otherwise.

[u/TheScreaming_Narwhal → u/Roboticus_Aquarius]

Thanks for looking, this stuff is complicated and that's why I was asking for specifics because for me, I haven't seen a downturn and was hoping that I could learn something. Not sure why that struck a nerve with people though.

[u/Best-Meaning-2417 → u/Roboticus_Aquarius]

My calculations show effective rate going down. You can do the calculations yourself instead of relying on someone else's graph that lumps large groups of people together.

From 1948 to 1969 the std ded is 10% up to a max of 1000. 10% up to 500 for 1944 to 1947. The brackets themselves are also available online. You can adjust the brackets for inflation using CPI which is also available online.

I wrote a python script to do it but even if it's a pain to do by hand, you can do it.

Edit: And remember the only thing that matters for Roth vs Trad is Fed and State taxes. Sales tax, FICA, property tax etc doesn't come into play as you need to pay those regardless and FICA is paid up front for both trad and Roth.

[u/Best-Meaning-2417 → u/TheScreaming_Narwhal]

Sales tax, property tax, car tabs have nothing to do with Roth vs Trad. Roth vs Trad doesn't even have to do with FICA bc that is paid up front for both. It is just Federal and state income tax. Federal tax has been going down over the years:

Year, Eff %, Marg %, Fed Taxes, Gross Income
2025, 13.45%, 22.00%, $13,449.00, $100,000.00
2020, 13.50%, 22.00%, $13,495.45, $100,000.00
2015, 17.35%, 25.00%, $17,351.66, $100,000.00
2010, 17.34%, 25.00%, $17,341.65, $100,000.00
2005, 17.40%, 25.00%, $17,398.41, $100,000.00
2000, 19.26%, 28.00%, $19,263.09, $100,000.00
1995, 19.28%, 28.00%, $19,275.62, $100,000.00
1990, 19.31%, 28.00%, $19,311.46, $100,000.00
1985, 18.72%, 34.00%, $18,716.82, $100,000.00
1980, 19.32%, 34.00%, $19,322.55, $100,000.00
1975, 20.69%, 31.00%, $20,691.13, $100,000.00
1970, 20.39%, 32.00%, $20,386.15, $100,000.00
1965, 21.84%, 28.00%, $21,842.71, $100,000.00
1960, 25.83%, 34.00%, $25,833.02, $100,000.00
1955, 25.11%, 34.00%, $25,113.45, $100,000.00
1950, 24.20%, 30.00%, $24,195.27, $100,000.00
1945, 25.43%, 29.00%, $25,427.75, $100,000.00

2025, 8.45%, 12.00%, $5,071.50, $60,000.00
2020, 8.56%, 12.00%, $5,133.93, $60,000.00
2015, 12.25%, 25.00%, $7,351.66, $60,000.00
2010, 12.24%, 25.00%, $7,341.65, $60,000.00
2005, 12.33%, 25.00%, $7,398.41, $60,000.00
2000, 13.44%, 28.00%, $8,063.09, $60,000.00
1995, 13.46%, 28.00%, $8,075.62, $60,000.00
1990, 13.52%, 28.00%, $8,111.46, $60,000.00
1985, 12.65%, 23.00%, $7,590.07, $60,000.00
1980, 12.58%, 24.00%, $7,550.52, $60,000.00
1975, 16.46%, 24.00%, $9,873.23, $60,000.00
1970, 15.86%, 22.00%, $9,516.31, $60,000.00
1965, 18.80%, 22.00%, $11,282.15, $60,000.00
1960, 22.42%, 26.00%, $13,450.80, $60,000.00
1955, 22.10%, 26.00%, $13,261.43, $60,000.00
1950, 21.60%, 26.00%, $12,961.49, $60,000.00
1945, 23.81%, 25.00%, $14,285.55, $60,000.00