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Comment by s1artibartfast | Hacker News Reader

That itself is an ahistorical take. Tax as a percent of the economy has gone through the roof, both as a percent of GDP, and as inflation adjusted dollars.

If you compare to a benchmark like the 1940s, tax% of GDP has more than doubled, and GDP has increased ~4x. This means someone today taxes are about 10X the taxes (controlling for for inflation!)

Consider that 40% of US GDP now is collected in some form of taxation.[1] 40 cents of every dollar earned is taxed and spent as the government chooses. This is more than between FDR and Regan, and much more than the 20s (~15% of GDP).

https://upload.wikimedia.org/wikipedia/commons/3/37/Federal%...

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I see your source here, but something about this isn’t sitting right with me. My data science senses are tingling, and I feel like while these numbers may be correct, they may not tell a complete story. The implication that average joe is paying 10x in taxes what we were a few decades ago really does not feel like a believable conclusion.

My presumption is that government spending has drastically increased since then. There are so many more services that the government provides. If you look at government spending, healthcare and social security are the two biggest spenders, which makes sense since the population is ageing and there are a lot more older people to provide money and services for.

Fascinating! How's that jive with the nominal tax rate being way higher back then? The highest bracket was 79% in 1940, and it's 37% today. Did we just get significantly better at taxing the middle class, or is there more at play?

The tax code in 1940 was not the current code with different rates but a different code entirely. To make an example (I am not a CPA and even less so a 1940s CPA): if you could have deducted your living expenses (food, rent/mortgage, clothes, vehicle etc.) even at the current rate you would not have been paying nearly as much in taxes as somebody who has to obey the current tax code. Same rate, different tax.

You really cannot express the tax regime with just a brackets table, the tax code alone, without IRS regulations and case law is 2600 pages as of now.

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