Daily Archives: July 20, 2011

Wednesday, 7/20/11, Public Square

U.S. federal government tax receipts as a percentage of GDP from 1945 to 2015 (note that 2010 to 2015 data are estimated)

Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period. It is often considered an indicator of a country’s standard of living (wiki).

From fiscal year 1946 to fiscal year 2007, federal tax receipts as a percentage of gross domestic product averaged 17.9%.  However, 2009 tax collections, at 15% of GDP, were the lowest level of the past 50 years and 4.5 percentage points lower than Hauser’s law suggests.   The proposition was first put forward in 1993 by William Kurt Hauser, a San Francisco investment economist, who wrote, “No matter what the tax rates have been, in postwar America tax revenues have remained at about 19.5% of GDP.”

But current revenue is about 14.5% of GDP (Clinton is the last president who pushed the rate over 19.5%)

What say ye bloggers?  Is Hauser’s law sensible?  If so, how much is the U. S. under taxing each year?


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