Taxes as a Percentage of the National Income
October 31, 2003
The Bureau of the Census of the United States Department of Commerce used to publish an annual review of the finances of federal, state, and local governments. The last published issue was Government Finances: 1991-1992.
One of its tables showed the revenue and expenditures of all governments, calculated per $1,000 of personal income. That table is shown below. It reveals that all governments together (federal, state, and local) taxed away $484.82 of every $1,000 of the nation's income — in other words, 48.5% of the national income. (Expenditures of all governmental units equaled 53.4% of the national income.) The footnote points out that all revenues or expenditures that might be duplicates, because of money passing from one governmental unit to another, have been excluded from the calculations.
Historical data through 1970 for total government revenue are available in Historical Statistics of the United States from Colonial Times to 1970, Part II, Series Y505, page 1119; published by the Bureau of the Census. Later years' data are available in various issues of the Statistical Abstract of the United States, also published by the Bureau of the Census, in the table "All Governments — Revenue, Expenditure & Debt," table 474 in the 1995 edition, near the beginning of the State & Local Finances section.
After 1995, government publications stopped including this series. Similar series have been developed, but their historical data haven't matched the figures in the earlier series. I have had to extrapolate the later years from the data that are available.
The National Income is available in most government statistical publications.
The graph at the bottom of this webpage shows the percentage of the national income eaten up by government revenues from 1900 through 1998.
(Please excuse the poor reproduction of this table.)