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“Hauser’s Law”: Can Tax Revenues Exceed 19% of GDP?

By: Joseph Bishop-Henchman

David Ranson has an interesting piece at the Wall Street Journal about "Hauser's Law," the observation that federal taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. revenues have historically not exceeded about 19%-20% of GDP despite significant increases and decreases in tax rates. The implication is that attempts to raise revenue above this purported ceiling will reduce GDP and thus reduce collections under the ceiling.

An interesting read with a neat chart.