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Figure 3

Government Spending as Percentage of GDP

36%

27%

15%

10%

1889-1919

1919-48

1948-73

1973-96

Source: Stephen Moore, Government: America's #1 Growth Industry (Lewisville, Tex.: Institute for Policy

Innovation, 1995), p. 36.

During the last 80 years, every aspect of the federal income tax system has grown

much more rapidly than the economy. In 1994 the per capita federal income tax levy of

$2,622 reached 12 percent of the $22,216 per capita personal income of Americans.5 The

combination of federal, state,

and local taxes now supports spending that consumes a re-

cord-high 36 percent of GDP. Our government is currently consuming a higher

percentage of our GDP than the 29 percent that it took at the peak of World War I, as

reflected in Figure 3.

Despite rapid increases in tax collections, the government spends money even

faster; it piled up a national debt of $4.7 trillion by 1994, over $18,000 for every

American. The interest payments on the national debt now equal twothirds of the entire

budget of the Defense Department. It's time to cut back.

The Case against Corporate Welfare