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Comment by rufus_foreman | Hacker News Reader

>> Isn't this why we declared independence in the first place? To get away from the British restricting free trade?

No. I'm not sure where you got that idea. If you look at something like the Boston Tea Party, it wasn't high taxes on tea that were being protested against, it was lowered taxes on tea that undercut the smuggling operations of people like Sam Adams and John Hancock. "No taxation without representation" makes better press than "No undercutting my smuggling operation" though.

In the early years of the US, between 80 and 90 percent of federal revenue came from tariffs. Not exactly free trade.

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> In the early years of the US, between 80 and 90 percent of federal revenue came from tariffs...

To be fair, the Federal Budget back then was 2%-ish of GDP. And their political consensus gave the Federal Gov't very few things that it had the power to tax.

For readers looking for context, Google tells me it was ~24% of GDP as of 2024

That seems impractical and unsustainable.

Based on what? Even adding in state spending, the US government spending share of GDP isn't high by world standards.

Govt spending as a share of GDP is probably a good measure of how involved the government is in the economy. There are arguments that too much government involvement leads to stagnation, which considering many of the economies the US regularly out-grows have higher share of govt spending as a % of GDP has some merit. Its an interesting economic question what level that would be which changes depending on how you approach the problem.

So that means the government is taking more than 1/5 of all the money generated by the US. That’s crazy and no wonder the nation is going bankrupt

It reminds me of the Portuguese court taking 1/5 of all the gold mined from colonial Brazil:

https://pt-m-wikipedia-org.translate.goog/wiki/Quinto_do_our...

State and local governments also take their cut. I believe the total is about 35%.

Important to note that outlays do not equal federal taxes, because spending exceeds revenue by a substantial margin.

https://fred.stlouisfed.org/series/FYONGDA188S

Is a better graph

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