Total Tax Receipts
6.40 In so far as tax drift applies to a major segment of the tax system, as in fact it does, it is inevitable that tax receipts will rise in relation to gross national product. As the statistics in Chapter 2 indicate, revenue from taxation has increased from 22.2 per cent of gross national product in 1959–60 to 27.7 per cent in 1973–74—in absolute terms an increase from $3,041 million to $13,768 million. While several factors have contributed to this upward trend, the tendency for inflation to push taxpayers into higher income tax brackets more quickly than otherwise has undoubtedly been responsible in no small measure. The windfall yield of tax drift is not without attractions for governments: extra revenue is obtained without the odium of lifting tax rates by legislation. But such illusions are unlikely to persist. People are already coming to realise that though their incomes before tax may be rising as fast or faster than prices, their incomes after tax are rising less than they had expected.