The Federal Tax Burden is the Highest it has been in the Post-World War II era.

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The Federal Tax Burden is the Highest it has been in the Post-World War II era


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A number of conservative outlets are relying on tax analyses by Bruce Bartlett, a staff member of the conservative National Center for Policy Analysis and a Dole advisor. Bartlett does not use the standard definition of federal tax revenues that the Congressional Budget Office and the Office of Management and Budget use. Instead, he relies on estimates of government receipts published by the Commerce Department.

The Commerce Department data, however, include as government receipts two large items (among others) that are not tax revenues. The Commerce data include as revenue the premiums that most elderly people choose to pay to purchase Medicare Part B (physician insurance) from the government. This is no more a tax than any other voluntary purchase, and neither CBO nor OMB treats the income from these premiums as tax revenue. (Since the Medicare bill that Congress passed in 1995 would have increased Medicare premiums, and the bill's supporters said they were not raising taxes, most of them apparently do not consider Medicare premiums a tax, either.)

The Commerce data also includes as a government receipt the amounts transferred from the Treasury to the Civil Service and Military Retirement Trust Funds. This intra-governmental transfer is a bookkeeping device, not a tax. Neither CBO nor OMB treats it as a tax.

Using these Commerce Department data as a measure of taxes the federal government collects results in an estimate of total receipts that is substantially higher than the tax revenue figures that CBO and OMB uses. It also produces an estimate that is growing more rapidly than the CBO and OMB data on tax collections. These Commerce Department data are now being used in some quarters to make it appear as though tax burdens are higher and growing more swiftly than is the case.



Average Tax Rates
(Revenues as a percentage of GDP)

Fiscal Year Federal State/Local  Total
2002 (current law projection) 18.5% 10.8% 29.3%
1996 (est.) 19.1 10.8 29.8
1995 18.9 10.8 29.6
1986 17.6 10.4 28.0
1982 19.2 10.0 29.2
1981 19.7 9.7 29.3
1980 19.0 9.8 28.8
1969 19.7 9.3 29.1
1990-99 avg (est.) 18.4 10.7 29.1
1980-89 avg 18.4 10.2 28.5
1970-79 avg 18.0 10.3 28.3

Federal revenues as a percentage of GDP are from CBO's Economic and Budget Outlook, May 1996, pages 37 and 137.



In 1980 & 1981 the top federal tax rate was 70%, from 1982 thru 1986 the top rate was 50%. Today the top rate is 39.6%.







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