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gross nations] product sines the 1944*45 period. Gross national product in the fourth quarter of 1950 was at an annual rate of |297 billions, as estimated bp the Council of Economic Advisors, compared with an average of under |215 billions for the 1944* 46 period. An annual rate of at least 5300 billions, therefore, appears to be a conservative assumption for the immediately foreseeable future. The decline in the dollar’s buying power since the end of the war doesn’t affect the validity of the comparison with respect to revenue potentials.
Another fact is that Federal revenues represented approximately 21 per cent of the gross national product in each of the wartime years of 1944 and 1945. The ratio subsequently declined, falling to 13 per cent for 1960._ The trend has since been reversed but the percentage is still well under the wartime peak.
Rise in Non-Military . Spending
A third fact is the very great increase since the last war in spending outside the budget classification of military services. Such spending totalled 614.1 billions in the 1946 fiscal year, a record up to that time. The comparable figure in the President’s recent budget message is $30.2 billions, and this contains billions of dollars above the 1946 level outside of such areas as atomic energy, interest on the public debt, and military aid for our Atlantic Pact allies. *
Restoration of the wartime proportion of Federal revenues to a gross national product of a size now indicated would bring about 663 lbilions into the Government coffers. The President’s request for 610 billions in additional taxation is substantially in line with this ratio: But with the budget so inflated in the non-military areas, such a boost in the tax burden at this time may not be necessary if the strictest economy is practiced, and if all non-essentials are cut out of the budget.
60.5%