Order Code RS20087
Updated June 15, 2001
CRS Report for Congress
Received through the CRS Web
The Level of Taxes in the United States,
1940-2000
David L. Brumbaugh
Specialist in Public Finance
Government and Finance Division
Summary
In Fiscal Year (FY) 2000, federal receipts as a percent of Gross Domestic Product
(GDP) reached 20.6%, their highest level since World War II for the third year in a row.
However, the peak is not dramatic; compared to the size of the U.S. economy, the
overall level of federal taxes has remained relatively stable over the past 45 years. In
addition, average tax burdens within each income group have declined in recent years —
an apparent paradox explained by a rapid growth in incomes at the upper end of the
income spectrum, where marginal tax rates are relatively high. The composition of
federal taxes has changed somewhat, generally shifting away from corporate income
taxes and excise taxes towards Social Security taxes.
This report will be updated as additional data become available. For additional
information on the level of taxes, see CRS Report RS20059, Recent Trends in the
Federal Tax Burden, by Gregg A. Esenwein. For more information on taxes in general,
see CRS Issue Brief IB10068, Major Tax Issues in the 107th Congress.
The Level of Taxes Compared to the Size of the Economy
Compared to the size of the U.S. economy, the overall level of federal taxes has
remained relatively stable for the past 45 years. Figure 1, below, shows federal receipts
as a percent of Gross Domestic Product (GDP) over the period 1940-2000; table 1
presents the corresponding data.1 The numbers indicate that during World War II, taxes
increased from a pre-war level of about 7% of GDP to 20.6% in 2000. Taxes fell
immediately after the war, but remained substantially above their pre-war level.
1 The receipts reported in figure 1 and table 1 include a small quantity of non-tax items in the
“other” category. However, non-tax items comprise such a small portion of the total that given this
report’s level of generality, we use the terms “taxes” and “receipts” interchangeably.
Congressional Research Service ˜ The Library of Congress

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CRS-2
Figure 1. Federal Receipts as a Percent of GDP, Fiscal Years 1940 - 2000
25
20
15
10
Percent of GDP
5
1940 1946 1952 1958 1964 1970 1976 1982 1988 1994 2000
Fiscal year
Individual
Corporate
Soc. Security
Excise
Other

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CRS-3
Table 1. Federal Receipts as a Percent of GDP, Fiscal Years 1940 - 2000
Individual
Corporate Income
Social Security
Excise
Total
Fiscal Year
Income Taxes
Taxes
Taxes
Taxes
Other
Receipts
1940
0.9
1.2
1.8
2.0
0.7
6.8
1941
1.2
1.9
1.7
2.2
0.7
7.6
1942
2.3
3.3
1.7
2.4
0.6
10.1
1943
3.6
5.3
1.7
2.3
0.4
13.3
1944
9.4
7.1
1.7
2.3
0.5
20.9
1945
8.5
7.2
1.6
2.8
0.5
20.4
1946
7.2
5.3
1.4
3.1
0.5
17.6
1947
7.6
3.7
1.5
3.1
0.6
16.4
1948
7.5
3.8
1.5
2.9
0.6
16.2
1949
5.7
4.1
1.4
2.8
0.5
14.5
1950
5.8
3.8
1.6
2.8
0.5
14.4
1951
6.7
4.4
1.8
2.7
0.5
16.1
1952
8.0
6.1
1.8
2.5
0.5
19.0
1953
8.0
5.7
1.8
2.6
0.5
18.6
1954
7.8
5.6
1.9
2.6
0.5
18.4
1955
7.3
4.5
2.0
2.3
0.5
16.6
1956
7.5
4.9
2.2
2.3
0.5
17.4
1957
7.9
4.7
2.2
2.3
0.6
17.7
1958
7.5
4.4
2.4
2.3
0.6
17.3
1959
7.5
3.5
2.4
2.2
0.6
16.1
1960
7.8
4.1
2.8
2.2
0.8
17.8
1961
7.8
3.9
3.1
2.2
0.7
17.7
1962
8.0
3.6
3.0
2.2
0.7
17.5
1963
7.9
3.6
3.3
2.2
0.7
17.8
1964
7.6
3.7
3.4
2.1
0.7
17.6
1965
7.1
3.7
3.2
2.1
0.8
17.0
1966
7.3
4.0
3.4
1.7
0.9
17.3
1967
7.6
4.2
4.0
1.7
0.9
18.3
1968
7.9
3.3
3.9
1.6
0.9
17.6
1969
9.2
3.9
4.1
1.6
0.9
19.7
1970
8.9
3.2
4.4
1.5
0.9
19.0
1971
8.0
2.5
4.4
1.5
0.9
17.3
1972
8.0
2.7
4.4
1.3
1.0
17.5
1973
7.9
2.8
4.8
1.2
0.9
17.6
1974
8.3
2.7
5.2
1.2
1.0
18.3
1975
7.8
2.6
5.4
1.1
1.0
17.9
1976
7.6
2.4
5.2
1.0
1.0
17.2
TQ
8.5
1.9
5.5
1.0
0.9
17.9
1977
8.0
2.8
5.4
0.9
1.0
18.0
1978
8.2
2.7
5.5
0.8
0.9
18.0
1979
8.7
2.6
5.5
0.7
0.9
18.5
1980
8.9
2.4
5.8
0.9
1.0
18.9
1981
9.3
2.0
6.0
1.3
0.9
19.6
1982
9.2
1.5
6.2
1.1
1.0
19.1
1983
8.4
1.1
6.1
1.0
0.9
17.5
1984
7.8
1.5
6.2
1.0
0.9
17.4
1985
8.1
1.5
6.4
0.9
0.9
17.7
1986
7.9
1.4
6.5
0.7
0.9
17.5
1987
8.4
1.8
6.5
0.7
0.9
18.4
1988
8.0
1.9
6.7
0.7
0.9
18.1
1989
8.2
1.9
6.6
0.6
0.9
18.3
1990
8.1
1.6
6.6
0.6
1.0
18.0

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CRS-4
Table 1 (continued). Federal Receipts as a Percent of GDP
1991
7.9
1.7
6.7
0.7
0.9
17.8
1992
7.7
1.6
6.6
0.7
0.9
17.5
1993
7.8
1.8
6.5
0.7
0.8
17.6
1994
7.8
2.0
6.6
0.8
0.8
18.1
1995
8.1
2.1
6.6
0.8
0.9
18.5
1996
8.5
2.2
6.6
0.7
0.8
18.9
1997
9.0
2.2
6.6
0.7
0.8
19.3
1998
9.6
2.2
6.6
0.7
0.9
19.9
1999
9.6
2.0
6.7
0.8
0.9
20.0
2000
10.2
2.1
6.6
0.7
0.9
20.6
Source: Office of Management and Budget., Budget of the United States Government, FY2002. Historical Tables.
For the next 5 decades, the level of taxes remained quite stable. The average for the
post-World War II period has been 18.5% of GDP. The lowest level was in 1950, at
14.4%; the highest was in 2000, at 20.6%. These are small departures from the average,
and most years remained quite close to the norm. On average, each year’s level of
revenues has varied from the post-war mean by less than 1% of GDP. The narrow range
of variation has been a consequence of both economic factors and conscious policy
decisions. For example, inflation helped push revenues to a peak in 1981, while the
Economic Recovery Tax Act of 1981 subsequently reduced them.
Recent data also show that average federal tax rates have fallen in recent years within
each income group. The seeming paradox of these falling tax burdens and the increased
aggregate level of taxes is explained principally by income growth at the high end of the
income spectrum and tax cuts enacted with the Taxpayer Relief Act of 1997.2
Composition of Federal Receipts
Figure 2, below, shows how the composition of federal receipts has changed since
World War II; it presents the percent of federal receipts contributed by each major
category of taxes. Over the past 50 years, corporate taxes and excise taxes have declined
in importance, while social insurance taxes (chiefly Social Security) have grown
substantially. Currently, the individual income tax still produces the most revenue and is
followed in size by social insurance taxes.
The supporting data for figure 2 are not provided here, but can be found in table 2.2
of the Historical Tables volume of the set of FY2002 budget documents released by the
Executive Office of the President.
2 See two Congressional Budget Office reports: Estimates of Federal Tax Liabilities. May, 1998;
and The Economic and Budget Outlook: Fiscal Years 2000-2009, January, 1999. See also: The
Federal Tax Burden. CRS Report RS20059, by Gregg Esenwein. February 11, 1999.

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CRS-5
Figure 2. Composition of Federal Receipts, Fiscal Years 1940-2000
100
80
60
40
Percent
20
01940 1947 1954 1961 1968 1975 1982 1989 1996
Fiscal Year
Individual
Corporate
Soc. Security
Excise
Other
State and Local Taxes
Figure 3 (on the following page) shows that state and local taxes have almost
doubled, rising from 5.0% of GDP in 1947 to 9.9% in 2000. As a result, total taxes —
federal, and state and local taxes combined — have grown by 9.0 percentage points, or by
well over a third of the 1947 level. (As with figure 2, the supporting data for figure 3 can
be found in the Historical Tables of the FY2000 budget — in this case, table 15.1 on page
269.) Note that the state and local receipts shown in the figure do not include federal
grants.

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CRS-6
Figure 3. Federal and State and Local Taxes as a Percent of GDP,
Fiscal Years 1947-2000
35
30
25
20
15
10
Percent of GDP
5
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997
Fiscal Year
Federal Receipts
State and Local Receipts

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