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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 [2], 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. [3] I used the Minnesota Fed’s on-line inflation converter (“What is a dollar worth?”) to convert all dollars into their 2010 values [4].