It's not only taxes and inflation.
Consider the content available in new cars nowdays. Those 65-71 vintage mustangs didn't come with dual smart airbags, power locks, power windows, airbags, fuel injection, 6-disc cd changers, security systems, ABS, big 4 wheel disc brakes, 17" aluminum wheels, catalytic converters, 3 year-36k mile warranties, etc, etc, etc. And that's just off the top of my head. Even a current base model GT is pretty loaded compared to those cars.
I'm not saying that cars aren't overpriced, I'm just saying that when you factor all this stuff in, the numbers start to make a bit more sense.