What is Tax Freedom Century?

The Tax Foundation has long calculated Tax Freedom Day, which illustrates the percentage of each year the U.S. economy works to fund government at all levels.

But what about “Tax Freedom Century”? That is, what part of the 20th Century did the U.S. economy work to fund the rapid expansion of government that took place during that period?

We did the math, and the answer may come as a surprise. It turns out Americans worked nearly one-third of the 20th Century to fund government—including two world wars, the Korean War, Vietnam, the New Deal, the Great Society and countless other local, state and federal government programs.

Overall, Americans spent 30.1 percent of the years between 1900 and 1999 working to pay Uncle Sam as well as state and local governments. As shown below, the exact moment of “tax freedom” last century fell around noon on February 5th, 1931.

With the powers of compounding, it is astonishing to think today of what a small reduction or increase in that figure could have meant to the cumulative effect on national output today.

“How Many Years Did the U.S. Economy Work to Pay Taxes During the 20th Century?”

Year

Total Taxes ($Billions)

NNP ($Billions)

1900

$1

$17

1901

$1

$19

1902

$1

$20

1903

$1

$21

1904

$1

$21

1905

$1

$23

1906

$1

$26

1907

$1

$28

1908

$1

$26

1909

$2

$31

1910

$2

$33

1911

$2

$33

1912

$2

$36

1913

$2

$36

1914

$2

$36

1915

$2

$37

1916

$3

$45

1917

$3

$56

1918

$7

$70

1919

$8

$77

1920

$10

$84

1921

$9

$64

1922

$8

$68

1923

$7

$78

1924

$8

$78

1925

$8

$86

1926

$9

$89

1927

$9

$87

1928

$9

$89

1929

$10

$95

1930

$9

$83

1931

$8

$68

1932

$8

$52

1933

$9

$50

1934

$9

$59

1935

$10

$66

1936

$12

$76

1937

$14

$84

1938

$13

$78

1939

$14

$84

1940

$16

$92

1941

$23

$116

1942

$31

$149

1943

$47

$183

1944

$49

$201

1945

$51

$202

1946

$50

$200

1947

$55

$219

1948

$56

$243

1949

$53

$240

1950

$65

$266

1951

$81

$308

1952

$85

$325

1953

$90

$344

1954

$85

$343

1955

$96

$375

1956

$103

$394

1957

$108

$414

1958

$107

$418

1959

$121

$456

1960

$130

$474

1961

$134

$491

1962

$145

$531

1963

$156

$560

1964

$160

$604

1965

$173

$655

1966

$195

$717

1967

$209

$757

1968

$242

$828

1969

$273

$893

1970

$276

$938

1971

$292

$1,020

1972

$333

$1,120

1973

$375

$1,256

1974

$414

$1,353

1975

$424

$1,464

1976

$485

$1,637

1977

$544

$1,821

1978

$616

$2,054

1979

$691

$2,295

1980

$752

$2,481

1981

$860

$2,773

1982

$869

$2,865

1983

$920

$3,130

1984

$1,021

$3,497

1985

$1,106

$3,740

1986

$1,173

$3,949

1987

$1,289

$4,195

1988

$1,381

$4,530

1989

$1,495

$4,866

1990

$1,572

$5,155

1991

$1,611

$5,300

1992

$1,695

$5,616

1993

$1,796

$5,913

1994

$1,934

$6,265

1995

$2,050

$6,555

1996

$2,197

$6,934

1997

$2,368

$7,363

1998

$2,536

$7,738

1999

$2,698

$8,201

Total

$39,196

$130,227

Here is the breakdown of America’s total tax burden for the full 20th Century:

Total taxes as a percentage of national income: 30.1 percent

Number of days in the 20th Century required to pay total taxes: 10,986 days

Number of years in the 20th Century required to pay total taxes: 30.1 years

Exact date and time of “tax freedom” for the 20 th Century: 12:00pm , February 5, 1931

Judging from the tax burden of last century—when overall spending was far lower than that of current governments—we’ve likely got a long way to go until “tax freedom” in the 21st century. For more on the official Tax Freedom Day, see here.


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