Tax rates in the U.S. were much higher in the 1940s and 1950s, but it didn’t result in the government collecting more tax revenue as a % of GDP. The tax code isn’t 60,000 pages because the corrupt politicians want to collect more taxes. It is 60,000 pages because our politicians have been bought off by special interests to give them tax breaks. The tax code will never be simplified because politicians would lose power. No matter what happens, the government will never collect tax receipts much more than 20% of GDP.
“No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP.” – William Kurt Hauser
Federal government spending, on the other hand, has surged to well above 20% of GDP and is on automatic pilot to explode to 30% of GDP as the entitlement promises of corrupt politicians come due over the next 30 years. The lying MSM perpetuate the falsehood that we don’t have a spending problem, counting on the fact that the average government public school educated dullard can’t do basic math computations.
When you add Federal, State, and Local government spending as % of GDP together, it exceeds 42%. This number was less than 30% in the 1950s and early 1960s. Has bigger government benefitted you? Is healthcare cheaper and more efficient? Do you have more freedom or less freedom? Are you more safe or less safe? Has your standard of living increased or decreased?
Raising tax rates on the rich sounds like a great idea, but they will figure out a way to not pay more taxes. The only solution is to cut our spending and reduce our debt. But it won’t happen. So it goes.