RSSTaxes as a Percentage of Gross Domestic Product 1980 – 2007
Ultimately, the size of the economy, called Gross Domestic Product (or GDP) is an absolute limit on the amount of taxes that you can collect. Growth in tax collections cannot exceed growth in the economy for very long. In fact, this chart shows that tax collections, as a percentage of GDP, have remained relatively constant for many years.
In 1980 and 2007, the government collected $571 billion and $2.57 trillion in taxes and other receipts, respectively. Dividing these amounts by the GDPs for those years ($2.79 trillion and $13.67 trillion) yields percentages of 18.9% and 18.8%, respectively. For the past 28 years, tax collections by the federal government have fluctuated within a narrow 5% range, with a high of 20.9% in 2000 and a low of 16.3% in 2004. The average tax collection rate over the 28-year period has been 18.4% of GDP.
3 Responses to “Taxes as a Percentage of Gross Domestic Product 1980 – 2007”
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June 16th, 2008 at 5:04 pm
This is more like it — a neutral, very factual chart. But as the next few years get tacked on, you’ll see that the surge of the past couple of years is a false one, driven by capital gains on a surging stock market. The stock market is now in the tank, and that line is going to go down all on its own.
June 17th, 2008 at 3:42 pm
It just seems extremely un-American to tax individual investments “earned” (by the way, does the government send you a check to cover your losses with the “Enron/Bear Stearns” investments?) with monies already taxed (as the comment above accurately details). In point, there are hundreds of other “taxes” on Americans that are not captured in this graph, that do effect the “pocket money” of Americans, as well as the economy overall.
June 19th, 2008 at 9:17 am
Clearly, increasing the revenue a few percentage points far offsets the damaging effects of debt.
The decreased revenue during the 2001-2003 period had extremely damaging effects on the national debt and the value of the dollar.