Federal Revenue at Lowest Share of G.D.P. Since 1950
Catherine Rampell
Federal revenue is at its lowest share of the economy since 1950, according to recent Congressional Budget Office data.
(SCROLL DOWN)
*
*
*
*
*
*
*
*
Source: Congressional Budget Office, Tax Policy Center, Roberton Williams Federal revenue comes primarily from taxes, including income, Social Security and excise taxes. This revenue total is projected to claim just 14.9 percent of gross domestic product in 2009. The last time federal revenue crept below 15 percent of G.D.P. was in 1950, when it fell to 14.4 percent. Since that time, federal revenue has averaged about 17.9 percent of the economy.
As Roberton Williams wrote on the TaxVox blog on Monday, federal revenue is especially low this year for three main reasons: tax cuts in this year’s economic stimulus, the collapse of the economy (which means people and companies earn less money, and therefore pay less in taxes), and the Bush tax cuts from earlier this decade.
The share of the economy taken up by tax revenue is projected to rise, though, in the coming decade (the faded portion in the graph above). These projections assume that the overall economy picks up, and that some portion of the Bush tax cuts are allowed to expire, as they would under current law.
economix.blogs.nytimes.com/2009/10/20/federal-revenues-at-lowest-share-of-gdp-since-1950/