Thursday, December 02, 2010

A better comparison

JLM's chart below of top rates is interesting, but even better is this one:

This one compares top rates to taxes collected as a share of GDP.  Note that the two are almost unrelated.  I got the chart from this article, which suggests there seems to be a natural ceiling on federal tax collections of 19% of GDP.


JLM said...

What happened in the Reagan years that raised the average IRS take from 15 percent to 19 percent?

Jim Gust said...

Nothing, the average annual IRS take went down slightly in the Reagan years. You were looking at the blue line, the 50-year average. It did indeed go up, because the sub-10% years of the 1930s began to fall out of the average.