Federal Receipts as a Percent of GDP measures total government revenue relative to the size of the economy, serving as a standardized way to track the federal tax burden over time.
Although the top marginal tax rate in the 1950s indeed exceeded 90%, federal receipts hovered around 17% of GDP; this was nearly identical to current levels, because loopholes and high income thresholds (roughly equivalent to $2MM for single/$4MM for couples) meant almost no one actually paid that top rate.
The effective tax rate for the top 1% was closer to 42% rather than 90%, demonstrating that extremely high statutory rates on paper do not necessarily generate proportionally higher government revenue.
Federal Receipts as a Percent of GDP measures total government revenue relative to the size of the economy, serving as a standardized way to track the federal tax burden over time.
Although the top marginal tax rate in the 1950s indeed exceeded 90%, federal receipts hovered around 17% of GDP; this was nearly identical to current levels, because loopholes and high income thresholds (roughly equivalent to $2MM for single/$4MM for couples) meant almost no one actually paid that top rate.
The effective tax rate for the top 1% was closer to 42% rather than 90%, demonstrating that extremely high statutory rates on paper do not necessarily generate proportionally higher government revenue.