Image: Taxes © Peter Gridley, Photographer

As Republicans and Democrats continue to bicker over who should be taxed and how much, one fact rarely gets mentioned: Most Americans today pay less in federal income taxes than they have in 60 years, and far less than they have during other wars.

This is particularly true for the wealthy: By 2007, the richest 400 Americans paid an average of 16.6% in income taxes, thanks to exemptions and low capital-gains taxes, far less than the same group had paid decades ago and well below the 26.4% that group had been taxed only 15 years earlier.

Add the hit of economic turmoil, and in the past two years the federal government has collected less of the nation's income than at any time since 1950: 14.9% of gross domestic product in taxes, compared with a post-World War II average of about 18%. One percentage point today equates to about $140 billion.

"Overall, taxes are very low right now," said Chuck Marr, the director of federal tax policy at the Center on Budget and Policy Priorities, a nonpartisan Washington, D.C., research group. In addition, "you have this tremendous shift (of wealth) in the United States to high-income people."

Meanwhile, with taxes low, the nation's public debt has soared to $10 trillion. But perhaps the most dramatic departure for U.S. taxpayers is not today's swollen debt load -- we've been there before -- but that never before have taxpayers been asked to give so little in wartime.

"This is the first time that we actually cut taxes and went to war," said John O. Fox, a tax-policy scholar and professor at Mount Holyoke College in Amherst, Mass. "There's less of a sense that we're all in it together."

How we got here

For most of America's history, federal spending and tax revenue charted a more-or-less parallel course, with the government approaching annual deficits of 10% of GDP -- the current level -- only during war or economic depression, then quickly leveling out.

By 1981, the country had racked up a paltry $789 billion in public debt, a mere 25.5% of the value of what the nation produced that year. And that was after a civil war, two world wars and many other foreign military conflicts, the Great Depression, the New Deal, the Great Society and much of the Cold War.

By contrast, today's public debt -- the total of two centuries of annual deficits minus any annual surpluses -- is approaching 70% of GDP. (Public debt is the amount the federal government owes others, and it's what economists use to gauge a nation's finances. Gross debt, now at $14.7 trillion, provides a larger number but includes money the government has borrowed from its own surpluses, such as from the Social Security trust.)

For decades, two things had kept the national debt under control: a generally robust post-WWII economy and relatively high tax rates.

In 1954, as President Dwight Eisenhower rejected fellow Republicans' efforts to reduce income taxes, then at 91% for top earners and 20% for low-income workers, he told the nation, "Every real American is proud to carry his share of that national burden."

He added, "Some think it is good politics to promise more and more government spending and, at the same time, more and more tax cuts for all." But, Eisenhower warned, "this is one kind of chicken that always comes home to roost."

At the time, just after the Korean War, the federal public debt stood at $230.9 billion ($1.94 trillion in 2011 dollars), or 60.7% of GDP.

By 1961, the year Eisenhower left office, the debt had been reduced to a post-WWII low of 44.6% of GDP even with expansion of highways and higher-education funding.

"You want to have taxes at a level so that in booms you're taking in probably more than you need and in recessions you're taking in less, but over time it averages out," said John Irons, the research and policy director at the Economic Policy Institute, a nonpartisan think tank that focuses on low- and middle-income Americans. "The problem is, the last 10 years we've been on a path of running deficits in both booms and recessions."

Go to war, pay a tax

The nation's first federal income tax was levied to help pay for the Civil War. Aiming at those with the greatest ability to pay, the Union applied a 3% tax rate on annual incomes over $800, which exempted most wage earners.

A year later, in 1862, Congress created a new top rate of 5% for those earning more than $10,000, "to address the concern that it was a rich man's war and a poor man's fight," said Joe Thorndike, the director of the Tax History Project at Tax Analysts, a nonprofit publisher of tax data. The sentiment, both then and in later wars, was: "People are dying; the least we can do is open our checkbooks."

The Civil War income tax expired in 1872, and the federal government returned to its reliance on tariffs to fund what were, by today's standards, its relatively limited operations. But in 1913, against fierce opposition, the states swiftly ratified the 16th Amendment, authorizing the federal government to collect income taxes.

With a graduated tax rate of 1% to 7% for those with incomes exceeding $3,000, the tax initially affected only the wealthiest citizens. Even when World War I prompted a steep tax hike, to a top rate of 67%, the federal income tax essentially hit less than 10% of earners.