Tuesday, April 08, 2008

Postwar Tax Rate Trending

The content of this editorial in today's WSJ is pretty standard fare. The part I found particularly interesting was the tax burden as a percent of GDP (the italicized distinction would surely be seized upon by both sides arguing the merits of the content) as it has varied over time since WWII. The authors (Cogan, Hubbard) argue that if the 2001 and 2003 tax cuts are allowed to lapse, the resulting tax load increase would put the tax rate as a percentage of GDP at its highest level in the postwar era. The article is worth a read (especially for those who may not realize how small military spending is in comparison to entitlements), but here is the key trend graphic:

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