What portion of the U.S. economy is consumed by federal, state and local taxes?
In 2020, federal, state and local governments collected a combined total of $5.4 trillion in taxes, amounting to 26% of the U.S. economy. This figure has increased from 10% of the economy in 1930. Governments also spent another 15% more of the economy than they collected in revenues. This is an effective tax on tomorrow's workers and taxpayers because it must be paid back. These figures account for all types of explicit taxes, including hidden taxes. However, they don't include implicit hidden taxes that impose the costs of government social policies by shifting their costs to the private sector.