Both of my parents were born in Germany. I was born in the US in 1946 but am now interested in getting my dual citizenship. I have read that because my parents were both German I already considered a citizen. Is this correct? I would like to get a German passport.

First you need to be able to show that both parents were German citizens at the time of your birth in the US. If either (or both) had renounced their German citizenship to become American citizens prior to your birth then you would not be a German citizen by birth and could not now apply for dual citizenship.

If you do decide to move forward and are successful be aware that as a German citizen you will owe taxes to Germany on your income, as well as to the US.

Here's a website that may help you understand dual citizenship:
Dual Nationality | United States Diplomatic Mission

You should contact the German Embassy for information and what kind of documents they would need from you.

http://www.germany.info/Vertretung/usa/en/05__Legal/02__Directory__Services/02__Citizenship/Citizenship__Obtain.html

Also, the tax system is different in Germany and you do not automatically owe taxes in Germany as Germany does not tax worldwide income if you live outside of Germany (differnt of course if you live in germany).