The Size of Government: A Few Numbers

In discussions of the size & role of government in the US, it is occasionally asserted that tax rates and/or government spending were higher and/or lower than today at a given point in our history.  So, in the name of general edification, I post the following:

Chart 1:  Total government spending as a percentage of GDP, 1929-2007


Notes:  “Federal” expenditures calculated by summing lines 40-43, minus line 44, in Table 3.2 from the BEA’s National Income & Product Account tables.  “State & local” expenditures taken from Table 3.3, line 33.  GDP data taken from Table 1.1.5, line 1.  “Total” simply sums federal, state, & local.

Another regular topic of interest is extent to which the tax burden borne by individual citizens has risen over time.  Hence the following tables:

Table I:  Decennial averages of tax burdens as a percentage of personal income:


Table II:  Decennial averages of tax burdens as a percentage of personal income (absent government benefits):


For Table I, the denominator is total personal income (1); for Table II, it’s personal income less government social benefits to persons (2).

“Fed I” basically equates to the tax burden of many employees, with the numerator being income taxes (3) plus the 1/2 of FICA (4) withheld from employee paychecks.

“Fed II” adds the other half of FICA taxes to “Fed I” on the notion that the entire FICA burden is ultimately borne by the employee anyway (whether via lower wages, or higher prices from firms that pay FICA taxes).

“Fed III” adds corporate (5), excise (6), & customs taxes (7) to “Fed II”, again on the notion that such taxes are ultimately borne by individual employees/consumers in the form of higher prices for various goods & services.

“State” proxies the tax burden imposed by state & local governments on individuals, by summing all “personal” state taxes (8) with sales (9) & property (10) taxes.

“Tot” sums “State” & “Fed III”.

Update:  Historical Effective Tax Rates:

Apropos this recent post….

Effective federal tax rates for the lowest four quintiles:


…and for various portions of the top quintile:


Source:  “Historical Effective Federal Tax Rates:  1979 to 2005“, Congressional Budget Office, December 2008.

Alas, my quick Google search on the topic didn’t turn up any pre-1979 data on effective tax rates.  Well, there was this source (courtesy of CBPP); however:

1.  It had an agenda; and

2.  More importantly, I wasn’t sure about the reliability of its data, given that, e.g., for the top 0.01% in 1980, it gave an effective federal tax rate of 59.4% (vs. 39.1% from CBO).

[Previously posted on Alexandria]


(1) NIPA Table 2.1, line 1

(2) NIPA Table 2.1, line 17

(3) NIPA Table 3.2, line 3

(4) NIPA Table 3.2, line 11

(5) NIPA Table 3.2, line 7

(6) NIPA Table 3.2, line 5

(7) NIPA Table 3.2, line 6

(8) NIPA Table 3.3, line 3

(9) NIPA Table 3.3, line 7

(10) NIPA Table 3.3, line 8


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