Here’s a letter to the New York Times:
Paul Wagenseil is correct that “From 1954 through 1963, federal income tax topped out at an astonishing 91 percent” – but he is mistaken to conclude from this fact that “the government during the Eisenhower years was able to do more because it had more” (Letters, Oct. 17).
Over the course of the ten years that Mr. Wagenseil praises for their “astonishing” tax rates, Uncle Sam’s annual revenues averaged 17.5 percent of GDP. During the ten-year stretch of 2000 through 2009, these revenues averaged 17.6 percent of GDP.
In 2010-dollar terms, the “astonishing” tax year with the highest federal revenues – 1963 – Uncle Sam’s receipts totaled $756 billion. During the period 2000 through 2009, the year with the lowest federal revenues – 2009 – Uncle Sam’s receipts totaled $2.1 trillion – or 178 percent more real revenues than in 1963.*
Sincerely,
Donald J. Boudreaux* Data are found in this 2010 OMB document. I used the Minnesota Fed’s on-line inflation converter (“What is a dollar worth?”) to convert all dollars into their 2010 values.
