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Making Sense: Are Taxes Lower Now Than the 1950s?

Paul Solman answers questions from NewsHour viewers and web users on business and economic news most days on his Making Sen$e page. Here’s Thursday’s query:

Making Sense

Name: Peter Anderheggen

Question: I recently heard that in 2011, the nation, on the whole, is paying substantially less in taxes than it did in the 1950s. I do not know if this is true or just a spin.

Paul Solman: Depends what you mean. As the economy has grown, so has the absolute amount of taxes, and even the amount adjusted for inflation. So no, we’re not paying less; we’re paying more. But relative to a year’s worth of economic output (GDP), government revenues have remained pretty constant, and with the tax cuts of the last decade, are now actually lower, as a share of GDP, than at any time since 1950.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions _Follow Paul on Twitter._

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