Historical Tax Rates (posted by DT)

I was at a social work symposium the other day and heard a talk by Mimi Abromovitz, a well known social work professor at Hunter College in New York. Her talk focused on something I hadn't though much about, federal taxing and spending over time in the US. So much of the debate we hear now is about how the government "keeps taking more and more of my money", but there's little perspective anywhere regarding whether or not that's actually true.

I tried to keep up with Dr. Abromovitz's sources, but I'm not very good at refined searches on wonkish tax policy websites so I'm having trouble digging them up. But a little of what I jotted down:

• The percentage of revenue collected by the federal government compared to GDP has declined significantly since 1945. Of course it was very high then due to WW II, but the percentage has continued to fall consistently since then.
• Federal spending was 21% of GDP in 1976, and now it's 15%
• AFDC/TANF (commonly referred to as "welfare") was paid to more than 10 million recipients in the 1980s and 1990s. In 2009 4 million people received it. As a percentage of the US population, 5% were receiving these benefits 30 years ago, and now it's 1.5%.

Now there are a few ways to look at this data, but here's one way for those Americans who constantly carp about how the government is taking all their money and giving it to lazy, shiftless, poor people: You've already gotten what you want. The Feds are doing way less redistribution of income to the poor than it used to. So why are you angrier than ever?

On a related note, from the Tax Policy Center:

In 2007, federal, state and local taxes claimed about $3.8 trillion, or 27
percent of U.S. gross domestic product. That's nearly $13,000 for every
American. Two-thirds of tax revenues went to the federal government.
It may sound like a lot, but other developed countries collect even more. In
2006, taxes in 30 of the world's richest countries averaged 36 percent of GDP; only
Mexico, Turkey, South Korea and Japan had tax rates lower than ours. And
taxes in many European countries exceeded 40 percent of GDP because these
nations offer more extensive government services than the United States
does. Americans do pay far more in individual income taxes than residents of
other wealthy nations. Nearly 37 percent of U.S. tax revenue came from
personal income taxes in 2006, about 10 percentage points more, on average,
than in other industrialized countries. But we pay much less in sales taxes;
17 percent of 2006 U.S. tax receipts were from taxes on goods and services,
or about half the 32 percent average for rich countries.

Bottom line: We may hate our taxes, but we pay far less than people in other wealthy countries