In my story on the next president and the economy I intimated that higher taxes might be in our future. That got me thinking about what today’s overall tax burden looks like in historical terms. Which meant it was time to make a chart!
GRAPHIC BY FEILDING CAGE
“Taxes” covers federal, state and local taxes paid by people (not corporations). The social insurance contributions are payroll taxes for Social Security and Medicare, plus I guess any state unemployment insurance contributions. It struck me that the tax burden hasn’t gone up at all since the late 1960s, and hasn’t really risen much since World War II. But social insurance contributions–mainly for Social Security, I would imagine–have been rising and rising.
The initial impression one gets from looking at this chart is that outside of Social Security and Medicare, government hasn’t grown for years (at least its share of the economy hasn’t grown). That’s mostly right, but not entirely: Almost $200 billion of Social Security revenue (about 1.3% of GDP) is being diverted each year to help finance the deficit run by the rest of the federal government. A decade from now that will no longer be possible, because Social Security will need the money. So yeah, I think higher taxes are in our future.
