Look What Happens To Tax Rates When Debt And Deficits Balloon


We don’t know about you, but we’re not excited about the apparent correlation here between massive government debt and deficits (blue and dotted blue lines) and sky-high marginal tax rates (red).

Yes, in previous eras, it appears that high taxes preceded the exploding debt and deficits.  But we have this sneaking suspicion that that apparently comforting pattern will be reversed this time.

Paul Sutter, who sent us the chart, notes the “30 year tax hangover” it took us to work off the debt we accumulated in WW2.  He also notes that it takes a lot less time to accumulate a mountain of debt than it does to pay it off.

See Also: Tracking The Second Great Depression

Source: Paul says the debt and deficit data comes from usgovernmentdebt.com and the tax data from rubinontax.com.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.