The Ratio of Government Revenues to GDP
The federal government is limited to collecting about 20% of GDP, decade after decade.
This chart traces the history of government spending/GDP. Total spending varies in terms of the amount of money borrowed by the government. But the revenues/GDP ratio is amazingly stable, especially for the federal government. Even during World War II, it did not get to 25%. This ratio is an upper limit on the ability of governments to extract wealth from the public.
Federal revenues are blue. State revenues are in red. Local revenues are in yellow/green. Total government revenue collected is about one-third of GDP.
